EXHIBIT 10.42
EXECUTION COPY
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LETTER OF CREDIT AGREEMENT
dated as of February 11, 2003
among
EOTT ENERGY OPERATING LIMITED PARTNERSHIP,
EOTT ENERGY CANADA LIMITED PARTNERSHIP,
EOTT ENERGY LIQUIDS, L.P.
and
EOTT ENERGY PIPELINE LIMITED PARTNERSHIP,
as joint and several Borrowers,
EOTT ENERGY LLC
and
EOTT ENERGY GENERAL PARTNER, L.L.C.,
as Guarantors,
STANDARD CHARTERED BANK,
as LC Agent, LC Issuer and Collateral Agent
and
THE LC PARTICIPANTS PARTY HERETO
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TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION................................................. 3
2. THE LETTERS OF CREDIT................................................................... 32
(a) General........................................................................ 32
(b) Requesting Letters of Credit................................................... 33
(c) Reimbursement and Participations............................................... 33
(d) No Duty to Inquire............................................................. 34
(e) LC Collateral.................................................................. 35
(f) Conditions Precedent to Extensions of Credit................................... 36
(g) Use of Proceeds................................................................ 45
(h) Mandatory Prepayments.......................................................... 45
(i) Application of Payments made to LC Agent....................................... 46
(j) Voluntary Reduction of Maximum Commitment Amount; Interest Rates and Fees...... 46
3. PAYMENTS TO LC PARTICIPANTS............................................................. 48
(a) General Procedures............................................................. 48
(b) Payment Obligations Absolute................................................... 48
(c) Capital Reimbursement.......................................................... 48
(d) Increased Cost of Letters of Credit............................................ 49
(e) Notice; Change of Applicable Lending Office.................................... 49
(f) Availability................................................................... 50
(g) Reimbursable Taxes............................................................. 50
4. OTHER ACTIONS OF CREDIT PARTIES......................................................... 51
5. REPRESENTATIONS AND WARRANTIES.......................................................... 52
6. AFFIRMATIVE COVENANTS................................................................... 59
(a) Payment and Performance........................................................ 59
(b) Payment of Expenses............................................................ 59
(c) Instruments, Documents, Securities or Chattel Paper............................ 59
(d) Books, Financial Statements and Reports........................................ 59
(e) Other Information and Inspections.............................................. 63
(f) Notice of Material Events and Change of Address................................ 64
(g) Maintenance of Properties...................................................... 64
(h) Discharge of Liens............................................................. 65
(i) Landlord's Waiver.............................................................. 65
(j) Maintenance of Existence and Qualifications.................................... 65
(k) Payment of Trade Liabilities, Taxes, etc....................................... 65
(l) Insurance...................................................................... 65
(m) Performance on Borrowers' Behalf............................................... 66
(n) Interest....................................................................... 66
(o) Compliance with Agreements and Law............................................. 66
(p) Environmental Matters; Environmental Reviews................................... 66
(q) Evidence of Compliance......................................................... 67
TABLE OF CONTENTS
(C0NTINUED)
(r) Agreement to Deliver Security Documents........................................ 67
(s) Newly Created or Acquired Subsidiaries......................................... 67
(t) Compliance with Agreements..................................................... 67
(u) Risk Management Policies....................................................... 68
(v) Retention of Financial Advisor and Commercial Finance Audits................... 68
7. NEGATIVE COVENANTS...................................................................... 68
(a) Indebtedness................................................................... 68
(b) Accounts....................................................................... 70
(c) Limitation on Liens............................................................ 70
(d) Hedging Contracts.............................................................. 70
(e) Limitation on Mergers, etc. and Issuances of Securities........................ 70
(f) Limitation on Asset Sales...................................................... 70
(g) Limitation on Distributions, Dividends and Redemptions......................... 71
(h) Limitation on New Businesses, Investments and Capital Expenditures............. 71
(i) Limitation on Credit Extensions................................................ 72
(j) Transactions with Affiliates................................................... 72
(k) Prohibited Contracts........................................................... 72
(l) Modification of Certain Agreements............................................. 72
(m) Open Positions................................................................. 72
(n) Redelivery of Borrowing Base Report............................................ 72
(o) Books and Records.............................................................. 73
(p) Minimum Consolidated EBIDA..................................................... 73
(q) Minimum Consolidated Tangible Net Worth........................................ 74
(r) Interest Coverage.............................................................. 74
(s) Current Ratio.................................................................. 75
(t) Compliance with Environmental Laws............................................. 76
8. EVENTS OF DEFAULT....................................................................... 76
9. RIGHTS AND REMEDIES..................................................................... 79
10. GUARANTY................................................................................ 79
11. LC AGENT................................................................................ 81
(a) Appointment and Authority...................................................... 81
(b) Exculpation, the LC Agent's Reliance, etc...................................... 81
(c) Credit Decisions............................................................... 82
(d) Indemnification................................................................ 82
(e) Rights as LC Participant....................................................... 82
(f) Sharing of Set-Offs and Other Payments......................................... 83
(g) Investments.................................................................... 83
(h) Benefit of this Section........................................................ 83
(i) Resignation.................................................................... 84
(j) Other Lender Parties........................................................... 84
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TABLE OF CONTENTS
(C0NTINUED)
12. ASSIGNMENTS AND PARTICIPATIONS.......................................................... 84
13. INDEMNIFICATION......................................................................... 86
14. MISCELLANEOUS........................................................................... 87
SCHEDULES AND EXHIBITS:
SCHEDULE I LC PARTICIPANT SCHEDULE
EXHIBIT A LETTER OF CREDIT REQUEST
EXHIBIT B CERTIFICATE ACCOMPANYING FINANCIAL STATEMENTS
EXHIBIT C BORROWING BASE REPORT
EXHIBIT D CASH FLOW REPORT
EXHIBIT E ENVIRONMENTAL COMPLIANCE CERTIFICATE
EXHIBIT F OPEN POSITION REPORT
EXHIBIT G VOLUME REPORT
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LETTER OF CREDIT AGREEMENT
LETTER OF CREDIT AGREEMENT, dated as of February 11, 2003 (as amended,
supplemented or otherwise modified from time to time, and including all
Schedules and Exhibits attached hereto, this "AGREEMENT"), among EOTT ENERGY
OPERATING LIMITED PARTNERSHIP, a Delaware limited partnership ("EOTT OLP"), EOTT
ENERGY CANADA LIMITED PARTNERSHIP, a Delaware limited partnership ("EOTT
CANADA"), EOTT ENERGY LIQUIDS, L.P., a Delaware limited partnership ("EOTT
LIQUIDS"), EOTT ENERGY PIPELINE LIMITED PARTNERSHIP, a Delaware limited
partnership ("EOTT PIPELINE", and together with EOTT Canada and EOTT Liquids,
each an "ADDITIONAL OBLIGOR" and collectively, the "ADDITIONAL OBLIGORS", and
the Additional Obligors together with EOTT OLP, on a joint and several basis,
the "BORROWERS"), EOTT ENERGY LLC, a Delaware limited liability company ("EOTT
LLC"), EOTT ENERGY GENERAL PARTNER, L.L.C., a Delaware limited liability company
("EOTT GP", and together with EOTT LLC, each a "GUARANTOR" and collectively, the
"GUARANTORS", and together with the Borrowers, each a "CREDIT PARTY" and
collectively, the "CREDIT PARTIES"), STANDARD CHARTERED BANK, a banking
institution organized and existing under the laws of England and Wales, as
administrative agent for the LC Participants (as defined below) (in such
capacity, the "LC AGENT" and in its individual capacity, "STANDARD CHARTERED")
and as LC Issuer and Collateral Agent hereunder, and each of the banks or other
lending institutions which is a party hereto (as evidenced by the signature
pages of this Agreement) or which may from time to time become a party hereto or
any successor or assignee thereof (each an "LC PARTICIPANT" and collectively,
the "LC PARTICIPANTS").
WHEREAS, on or about April 23, 0000, XXXX XXX, XXXX Xxxxxx, EOTT
Liquids, and EOTT Pipeline (collectively, the "PREPETITION BORROWERS"), EOTT
Energy Partners, L.P., a Delaware limited partnership ("EOTT MLP") and EOTT GP,
as guarantors, the lenders party thereto (the "PREPETITION LENDERS"), and
Standard Chartered as administrative agent for the Prepetition Lenders (the
"PREPETITION AGENT") and letter of credit issuer thereunder (the "PREPETITION LC
ISSUER") entered into that certain Second Amended and Restated Reimbursement,
Loan and Security Agreement (the "PREPETITION CREDIT AGREEMENT"), pursuant to
which the Prepetition Lenders and the Prepetition LC Issuer provided credit
extensions to the Prepetition Borrowers on the terms and conditions set forth
therein;
WHEREAS, on October 8, 2002 (the "FILING DATE"), the Credit Parties (or
their predecessor entities, as the case may be), filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code (as defined below) (jointly
administered under Chapter 11 Case No. 02-21730) (the "CASES") in the United
States Bankruptcy Court for the Southern District of Texas, Corpus Christi
Division (the "BANKRUPTCY COURT");
WHEREAS, in connection with the Cases, EOTT OLP, EOTT Canada, EOTT
Liquids, and EOTT Pipeline (collectively, the "DIP BORROWERS"), EOTT MLP and
EOTT GP (collectively, the "DIP GUARANTORS", and together with the DIP
Borrowers, the "DEBTORS"), the lenders party thereto (the "DIP LC
PARTICIPANTS"), and Standard Chartered as administrative agent for the DIP LC
Participants (the "DIP LC AGENT") and letter of credit issuer thereunder (the
"DIP LC ISSUER"), entered into that certain Debtor in Possession Letter of
Credit Agreement, dated as of October 18, 2002 (as amended, restated,
supplemented, amended and
restated or otherwise modified from time to time, the "DIP LC AGREEMENT")
pursuant to which the DIP LC Participants and the DIP LC Issuer extended credit
to the DIP Borrowers on the terms set forth therein;
WHEREAS, pursuant to the DIP LC Agreement, the DIP LC Issuer has issued
and will issue certain DIP Letters of Credit which will be outstanding and
undrawn as of the Closing Date, together with additional amounts for certain
contingent claims for reimbursement, indemnification and the like, the
obligations of the DIP Borrowers in respect thereof being guaranteed by the DIP
Guarantors;
WHEREAS, on February 12, 2003, a hearing (the "CONFIRMATION HEARING")
is scheduled in the Bankruptcy Court with respect to confirmation of the
Reorganization Plan (as defined herein) of the Debtors;
WHEREAS, as a condition to the effectiveness of the Reorganization Plan
the Debtors shall have paid in full, in cash, all amounts due and payable on the
Closing Date under the DIP LC Agreement, and the DIP Letters of Credit and other
amounts accrued thereunder shall be provided for as set forth in this Agreement;
WHEREAS, the Borrowers have requested that Standard Chartered and the
other LC Participants provide financing to the Borrowers pursuant to this
Agreement, pursuant to which Standard Chartered and the other LC Participants
would extend to Borrowers a letter of credit facility not to exceed at any one
time outstanding $325,000,000 (as such amount may be reduced or terminated
pursuant to this Agreement and subject to availability under the Borrowing Base
(as defined herein)), to be made available in the form of letters of credit
issued from time to time by the LC Issuer at the request and for the account of
Borrowers, to be used by the Borrowers as provided in Section 2(a)(ii)(4);
WHEREAS, subject to the Intercreditor Agreement (as defined herein),
the Credit Parties desire to secure all of the Obligations hereunder and under
the Credit Documents by granting to the Collateral Agent, for the benefit of the
Secured Parties (as defined herein), a perfected first-priority Lien in the
Collateral;
WHEREAS, each of the Guarantors will derive substantial direct and
indirect benefit from the credit made available by the LC Participants and the
LC Issuer to the Borrowers; and
WHEREAS, the Guarantors are willing to guarantee the reimbursement and
other obligations of the Borrowers hereunder;
NOW, THEREFORE, in consideration of these premises and the mutual
undertakings set forth herein, the parties hereto hereby agree as follows:
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1. DEFINITIONS AND RULES OF INTERPRETATION. As used in this Agreement,
unless otherwise defined herein, all terms used herein which are defined in
Article 1 or Article 9 of the UCC (as in effect from time to time) shall have
the meanings set forth therein unless otherwise defined in this Agreement, and
all references to the plural herein shall also mean the singular. As used in
this Agreement, each of the following terms has the meaning given to such term
in this Section 1 or in the Sections and subsections referred to below:
"ACCEPTABLE ISSUER" means any national or state bank or trust company
which is organized under the laws of the United States of America or
any state thereof, or any branch licensed to operate under the laws of
the United States of America or any state thereof which is a branch of
a bank organized under any country which is a member of the
Organization for Economic Cooperation and Development, in each case
which has capital, surplus and undivided profits of at least
$500,000,000 and whose commercial paper is rated at least P-1 by
Xxxxx'x or A-1 by S&P.
"ACCOUNT" has the meaning given that term in the UCC.
"ACCOUNT DEBTOR" means any Person who is or who may become obligated
under, with respect to, or on account of, an Account.
"ADMINISTRATIVE AGENTS" means the Term Lender Agent and the LC Agent.
"AFFILIATE" means, as to any Person, each other Person that directly or
indirectly (through one or more intermediaries or otherwise) controls,
is controlled by, or is under common control with, such Person. A
Person shall be deemed to be "controlled by" any other Person if such
other Person possesses, directly or indirectly, power (i) to vote 5% or
more of the securities (on a fully diluted basis) having ordinary
voting power for the election of directors or managing general partners
or (ii) to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.
"AGREEMENT" has the meaning set forth in the preamble.
"ALTERNATE BASE RATE" means the higher of (i) the variable per annum
rate of interest so designated from time to time by the LC Agent as its
"base rate" and (ii) the Federal Funds Rate, plus one-half percent
(0.5%) per annum, in each case, plus three percent (3%) per annum. The
"base rate" is a reference rate and does not necessarily represent the
lowest or best rate being charged to any customer of the LC Agent.
Changes in the Alternate Base Rate resulting from changes in the "base
rate" shall take place immediately without notice or demand of any
kind.
"APPLICABLE LENDING OFFICE" means with respect to any LC Participant,
the office of such LC Participant specified as its "Applicable Lending
Office" in the LC Participant Schedule, or such other office as such LC
Participant may from time to time specify to the Borrower
Representative and the LC Agent and, with respect to the LC Agent, the
office, branch or agency through which it administers this Agreement.
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"APPLICABLE MARGIN" means the applicable margin set forth below that
corresponds to the Average Daily Maximum Drawing Amount as determined
on the last Business Day of each month:
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APPLICABLE MARGIN FOR
AVERAGE DAILY MAXIMUM LETTERS OF CREDIT
DRAWING AMOUNT (PER ANNUM)
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Less than or equal to 2.75%
$325,000,000 but greater than
$250,000,000
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Less than or equal to 2.50%
$250,000,000 but greater than
$200,000,000
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Less than or equal to 2.25%
$200,000,000
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"APPRAISED VALUE OF ELIGIBLE FIXED ASSETS" means the value of Eligible
Fixed Assets on an orderly liquidation basis as calculated from time to
time by one or more independent appraisers selected by the LC Agent
utilizing methodologies satisfactory to the LC Agent. Until revised as
a result of subsequent appraisals, it is agreed that the aggregate
Appraised Value of Eligible Fixed Assets is $125,000,000 (exclusive of
the Credit Parties' linefill relating to Eligible Fixed Assets).
"AUTHORIZED ACCOUNTS" has the meaning assigned to such term in the
Intercreditor Agreement.
"AVERAGE DAILY MAXIMUM DRAWING AMOUNT" means, for Letters of Credit for
any month, the quotient of (i) the sum of the Maximum Drawing Amount
for such Letter of Credit as it exists at 5:00 p.m., New York time, for
each day of such month divided by (ii) the total number of days in such
month.
"BANKRUPTCY CODE" means Xxxxx 00, Xxxxxx Xxxxxx Code.
"BANKRUPTCY COURT" has the meaning set forth in the recitals.
"BENEFICIARY" means any beneficiary identified in any Letter of Credit.
"BIG WARRIOR SETTLEMENT" means the payment by EOTT Pipeline of an
amount not exceeding $1,800,000 in cash to Big Warrior Corporation, and
issuance of a promissory note in original principal amount of up to
$2,700,000 by EOTT Pipeline in favor of Big Warrior Corporation, all as
part of the settlement of Big Warrior Corp. v. EOTT Energy Corp., No.
2:02CV749PG (S.D. Miss.) filed August 5, 2002.
"BORROWER EXPENSES" means, whether or not the transactions contemplated
hereby shall be consummated, (a) any and all sums, costs and expenses
incurred in connection with
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(i) the preparation and negotiation of this Agreement, the other Credit
Documents and any related agreements or instruments, together with any
amendments or supplements hereto or thereto, (ii) defending,
protecting, maintaining or enforcing the security interests granted
herein or in defending, collecting or attempting to collect the
Obligations, including, without limitation, all search, filing and
recording fees, taxes, attorneys' fees, legal expenses, (b) reasonable
and documented fees, expenses and disbursements of the LC Agent's
Special Counsel, and any local counsel to the LC Agent, incurred in
connection with (i) the preparation, administration, interpretation or
syndication of the Credit Documents and other instruments mentioned
hereunder, and any amendments, modifications, approvals, consents or
waivers hereto or hereunder of any of the Credit Documents or (ii)
services rendered in connection with representing the DIP Collateral
Agent, DIP LC Agent, the DIP LC Participants and the DIP LC Issuer in
the Cases, (c) the reasonable fees, expenses and disbursements of the
LC Agent and any of its affiliates incurred by the LC Agent or such
affiliate in connection with the preparation, administration,
interpretation or syndication of the Credit Documents and other
instruments mentioned herein, including all appraisal charges and
charges of other professionals retained by the LC Agent, and all title
insurance premiums and surveyor, engineering, appraisal and examination
charges, and (d) the reasonable and documented (to the reasonable
satisfaction of the Borrowers) fees and expenses of KPMG (and any
successor thereto) and any other advisors retained by the LC Agent,
including those retained in connection with the Cases.
"BORROWERS" has the meaning set forth in the preamble.
"BORROWER REPRESENTATIVE" means, for purposes of making Letter of
Credit Requests to the LC Agent, receiving Letters of Credit from the
LC Issuer, and otherwise communicating with the LC Agent on behalf of
the Borrowers, and taking any action required under this Agreement on
behalf of the Borrowers (and all of the Borrowers shall be bound
thereby), including consent to and any modifications, amendments or
supplements to this Agreement or related documents, EOTT OLP.
"BORROWING BASE" means, as of any date of determination:
(i) the sum of the following as of such date of determination
(without duplication):
(A) 100% of Eligible Cash Equivalents; plus
(B) 90% of Tier I Eligible Receivables; plus
(C) 85% of Tier II Eligible Receivables; plus
(D) 90% of Tier I Eligible Crude/Product/Liquid
Deliveries; plus
(E) 85% of Tier II Eligible Crude/Product/Liquid
Deliveries; plus
(F) 80% of the Appraised Value of Eligible Fixed Assets,
but in no event to exceed $125,000,000; plus
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(G) 90% of NYMEX Hedged Eligible Inventory; plus
(H) 80% of Other Hedged Eligible Inventory; plus
(I) 80% of the Market Value of Unhedged Eligible
Inventory; plus
(J) 80% of Eligible Margin Deposits; plus
(K) 80% of all Undrawn Product Purchase Letters of
Credit; plus
(L) So long as a Borrower shall own the MTBE Assets,
$65,000,000;
(ii) minus the following as of such date of determination (without
duplication):
(A) 100% of First Purchase Crude Payables; plus
(B) 100% of Other Priority Claims; plus
(C) 110% of the aggregate net amounts payable by each
Borrower under all Hedging Contracts to which it is a
party; plus
(D) The amount of any setoff or contra account to any
Eligible Receivable that could arise from an
obligation of any Borrower to sell or purchase crude
oil in any future month to the extent not otherwise
reflected as a reduction of Eligible Receivables,
such amount to be determined on an early termination
or xxxx to market basis;
(iii) minus the principal amount of loans outstanding and any
accrued and unpaid interest, fees and expenses under the Xxxxxx Credit
Agreement;
(iv) minus all outstanding amounts under the Purchase Agreements,
including all accrued and unpaid fees and expenses thereunder;
provided, however, that on and after the date (x) four (4) months after
the Closing Date, the LC Agent shall be entitled to reduce the
percentage rates set forth above (the "ADVANCE RATES") other than under
clauses (i)(A) and (i)(F) by up to two and one half percent (2.5%), and
under clause (i)(F) by up to five percent (5%), and (y) eight (8)
months after the Closing Date, the LC Agent shall be entitled to reduce
the Advance Rates other than under clauses (i)(A) and (i)(F) by up to
an additional two and one half percent (2.5%), and under clause (i)(F)
by an additional five percent (5%), in each case by written notice to
the Borrower Representative setting forth such revised Advance Rates.
"BUSINESS DAY" means any day, other than a Saturday, Sunday or day
which shall be in the State of New York a legal holiday or day on which
banking institutions are required or authorized to close.
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"BUSINESS PLAN" shall be the initial Business Plan as defined in
Section 2(f)(i)(12), as such Business Plan shall be updated pursuant to
Section 6(d)(v).
"CAPITAL EXPENDITURES" means for any period, Consolidated expenditures
(including the aggregate amount of Capital Lease obligations incurred
during such period) made by EOTT LLC and its Consolidated Subsidiaries
to acquire or construct fixed assets, plant or equipment (including
renewals, improvements or replacements, but excluding repairs) during
such period and which, in accordance with GAAP, are classified as
capital expenditures.
"CAPITAL LEASE" means a lease with respect to which the lessee is
required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"CASES" has the meaning set forth in the recitals.
"CASH BUDGET" means the monthly projected cash flows set forth in the
Post-Confirmation Projections, as supplemented from time to time
pursuant to Section 6(d)(xiii).
"CASH EQUIVALENTS" means Investments in:
(i) marketable obligations, maturing within 12 months
after acquisition thereof, issued or unconditionally
guaranteed by the United States of America or an
instrumentality or agency thereof and entitled to the
full faith and credit of the United States of
America;
(ii) demand deposits and time deposits (including
certificates of deposit) maturing within 180 days
from the date of deposit thereof, (A) with any office
of any LC Participant or (B) with a domestic office
of any national or state bank or trust company which
is organized under the Laws of the United States of
America or any state therein, which has capital,
surplus and undivided profits of at least
$500,000,000 and whose long-term certificates of
deposit are rated at least Aa3 by Xxxxx'x or AA- by
S&P;
(iii) repurchase obligations with a term of not more than
seven days for underlying securities of the types
described in subsection (i) above entered into with
(A) any LC Participant or (B) any other commercial
bank meeting the specifications of subsection (ii)
above;
(iv) commercial paper, other than commercial paper issued
by any Credit Party or its Affiliates, maturing
within 180 days after acquisition thereof and having
a rating of at least P-1 by Xxxxx'x or A-1 by S&P;
and
(v) money market or other mutual funds substantially all
of whose assets comprise securities of the types
described in subsections (i) through (iv) above.
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"CASH FLOW REPORT" means a report prepared on the first Business Day of
each month by the Borrower Representative reflecting as of the last day
of the immediately preceding month EOTT LLC's and its Subsidiaries'
cash flows for such month, on an actual (historical to EOTT MLP or EOTT
LLC, as the case may be) and projected (forecast) basis, substantially
in the form of Exhibit D hereto, and reflecting the cash flows
attributable to each of the Designated Assets by facility as a separate
item.
"CASH WATERFALL" has the meaning set forth in the Intercreditor
Agreement.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System List of the Environmental Protection
Agency.
"CHANGE IN CONTROL" means the occurrence of any of the following
events: (i) any two or more of Xxx Xxxxxxxx, Xxxxx Xxxxx, Xxxx Xxxxx,
Xxxx Xxxxxx and H. Xxxxx Xxxxxxx shall cease for any reason not
reasonably acceptable to the Majority LC Participants to serve as, in
the case of Xx. Xxxxxxxx a director, and in the case of each other
person, an executive officer, of EOTT LLC (unless any such officer
shall have ceased to serve as a result of death, disability,
termination for cause as determined by the EOTT LLC Board of Directors
or other reason reasonably acceptable to Majority LC Participants) and
such individual has not been replaced by Persons reasonably acceptable
to the Majority LC Participants within a reasonable period of time, and
(ii) any Person or group shall be the legal and beneficial owner
(within the meaning of Rule 13d-3 under the Securities Exchange Act of
1934, as amended) of 50% or more of the combined voting power of the
then total membership interests (including all securities that are
convertible into membership interests) of EOTT LLC.
"CLOSING DATE" means the date agreed to by the Borrower Representative
and the LC Agent for the initial Extensions of Credit under this
Agreement, which date shall occur after the Confirmation Order becomes
the Final Order of the Bankruptcy Court, but not before all of the
conditions precedent in this Agreement for such Extension of Credit
have been satisfied.
"CLOSING DATE CERTIFICATE" means the officer's certificate delivered to
the LC Agent pursuant to Section 2(f)(i)(12), attaching (a) the
Post-Confirmation Projections, (b) the Business Plan, (c) the Security
Schedule, (d) the Disclosure Schedule, (e) the initial Cash Budget and
(f) a schedule of all changes anticipated to be made upon application
of "fresh start" accounting to the financial statements of EOTT LLC and
its Consolidated Subsidiaries that are reflected in the
Post-Confirmation Projections.
"COLLATERAL" has the meaning set forth in the Intercreditor Agreement.
"COLLATERAL AGENT" means Standard Chartered, acting as collateral agent
on behalf of the LC Issuer, the LC Participants, SCTSC, the Term
Lenders and the Administrative Agents in accordance with the
Intercreditor Agreement.
"COMMITMENT FEE RATE" means one-half percent (0.5%) per annum.
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"COMMITMENT PERIOD" means the period from and including the date hereof
until the Termination Declaration Date.
"CONFIRMATION HEARING" has the meaning set forth in the recitals.
"CONFIRMATION ORDER" means the order of the Bankruptcy Court, dated on
or about the date of the Confirmation Hearing, and confirming the
Reorganization Plan pursuant to Section 1129 of the Bankruptcy Code.
"CONSOLIDATED" means the consolidation of any Person, in accordance
with GAAP, with its properly consolidated Subsidiaries. References
herein to a Person's Consolidated financial statements, financial
position, financial condition, liabilities, etc. refer to the
consolidated financial statements, financial position, financial
condition, liabilities, etc. of such Person and its properly
consolidated Subsidiaries.
"CONSOLIDATED CURRENT ASSETS" means all assets of the Borrowers and
their Subsidiaries on a Consolidated basis that, in accordance with
GAAP, are properly classified as current assets, including (without
duplication) all crude oil, refined petroleum products or natural gas
liquids in pipeline or storage assets owned by a Borrower at the time
of determination, valued in accordance with GAAP; provided, that
"Consolidated Current Assets" shall exclude (i) all the fixed assets of
the Designated Assets during the first three months following the
Closing Date, and (ii) in the calculation thereof, those items
enumerated in Permitted Adjustments.
"CONSOLIDATED CURRENT LIABILITIES" means all Liabilities and other
Indebtedness of the Borrowers and their Subsidiaries on a Consolidated
basis that, in accordance with GAAP, are properly classified as current
liabilities; provided, that "Consolidated Current Liabilities" shall
exclude (i) Funded Debt, (ii) all the Liabilities and Indebtedness
directly attributable to the Designated Assets during the first three
months following the Closing Date, and (iii) in the calculation
thereof, those items enumerated in Permitted Adjustments.
"CONSOLIDATED EBIDA" means, for any period, the sum of (without
duplication) (i) Consolidated Net Income (Loss) for such period, plus
(ii) all interest expense that was deducted in determining such
Consolidated Net Income (Loss), plus (iii) all depreciation,
amortization (including amortization of good will and debt issue costs)
and other non-cash charges (excluding any non-cash charge to the extent
it represents an accrual of, or reserve for, cash disbursement for any
of the next succeeding four Fiscal Quarters), minus (iv) all non-cash
items of income that were included in determining such Consolidated Net
Income (Loss) (excluding any non-cash item to the extent it represents
an accrual for cash receipt in any of the next succeeding four Fiscal
Quarters); provided, that "Consolidated EBIDA" shall exclude (x) all
the foregoing items directly attributable to the Designated Assets
during the first three months following the Closing Date, and (y) in
the calculation thereof, those items enumerated in Permitted
Adjustments.
"CONSOLIDATED NET INCOME (LOSS)" means, for any period, EOTT MLP's or,
as the case may be, EOTT LLC's Consolidated gross revenues for such
period, including any cash
9
dividends or distributions actually received from any other Person
during such period, minus EOTT MLP's or, as the case may be EOTT LLC's
Consolidated expenses and other proper charges against income
(including taxes on income to the extent imposed), determined on a
Consolidated basis after eliminating earnings or losses attributable to
outstanding minority interests and excluding the net earnings of any
Person other than a Subsidiary in which EOTT MLP or, as the case may
be, EOTT LLC or any of its Subsidiaries has an ownership interest;
provided, that "Consolidated Net Income (Loss)" shall exclude (i) gross
revenues and expenses directly attributable to the Designated Assets
during the first three months following the Closing Date, and (ii) in
the calculation thereof, those items enumerated in Permitted
Adjustments.
"CONSOLIDATED TANGIBLE NET WORTH" means, at any time, (a) the
Consolidated members' capital of EOTT LLC and its Subsidiaries plus (b)
the principal amount of any payment-in-kind notes issued in lieu of
cash payment of interest on the New Senior Notes less (c) Intangible
Assets (to the extent included in determining such Consolidated
members' capital). For this purpose "INTANGIBLE ASSETS" means, the
amounts of (i) all write-ups subsequent to December 31, 2002 in the
book value of any non-current asset owned by EOTT LLC or any
Subsidiary, (ii) all investments in Persons that are not Subsidiaries,
except to the extent included in Cash Equivalents, and (iii) all
unamortized debt discount and expense (other than fees and expenses
related to any Funded Debt), unamortized deferred charges, goodwill,
Intellectual Property, organizational or research and developmental
expenses and other intangible items (other than with respect to any
Designated Asset); provided, that "Consolidated Tangible Net Worth"
shall exclude (x) any Consolidated members' capital of EOTT LLC and its
Subsidiaries to the extent directly attributable to the Designated
Assets during the first three months following the Closing Date, and
(y) in the calculation thereof, those items enumerated in Permitted
Adjustments.
"CONSOLIDATED TOTAL INTEREST EXPENSE" means, for any period, the
aggregate amount of interest required to be paid or accrued by any
Borrower or its Subsidiaries during such period on all Indebtedness of
such Borrower and its Subsidiaries outstanding during all or any part
of such period, whether such interest was or is required to be
reflected as an item of expense or capitalized, including payments
consisting of interest in respect of any Capital Lease or any Synthetic
Lease, and including commitment fees, agency fees, facility fees,
balance deficiency fees and similar fees or expenses in connection with
the borrowing of money; provided, that "Consolidated Total Interest
Expense" shall exclude (i) the Reduction Fee payable pursuant to
Section 2(j)(ix); (ii) any such interest, fees or expenses to the
extent directly attributable to the Designated Assets during the first
three months following the Closing Date, (iii) in the calculation
thereof, those items enumerated in Permitted Adjustments, and (iv) the
principal amount of any payment-in-kind notes issued in lieu of cash
payment of interest on the New Senior Notes.
"CONTROL AGREEMENT" has the meaning set forth in the Intercreditor
Agreement.
"CREDIT DOCUMENTS" means, collectively (i) the Purchase Agreements and
each and every other agreement, document, certificate or instrument
between SCTSC and any Credit Party or otherwise made, executed or
delivered by any Credit Party for the benefit
10
of SCTSC that is entered into or delivered on or after the date hereof,
(ii) this Agreement, the Letters of Credit, the Letter of Credit
Requests, the Syndication Letter and each and every other agreement,
document, certificate or instrument between any Lender Party, and any
Credit Party or otherwise for the benefit of any Lender Party that is
entered into or delivered on or after the date hereof and (iii) the
Security Documents.
"CREDIT PARTIES" has the meaning set forth in the preamble as of the
date hereof, together with such other Persons who may from time to time
become party to this Agreement pursuant to the terms hereof.
"CRUDE OIL PURCHASE AGREEMENT" means that certain Second Amended and
Restated Commodities Repurchase Agreement, dated as of the date hereof,
by and among SCTSC and EOTT OLP (as amended, amended and restated,
supplemented or otherwise modified from time to time).
"CURRENTLY APPROVED BY THE LC AGENT" means such Person (including a
limit on the maximum credit exposure to any such Person), storage
location, pipeline, form of letter of credit, event, action, policy, or
other matter, as the case may be, as reflected in the most recent
written notice given by the LC Agent to the Borrower Representative as
then being approved; provided, that, with respect to any Account
Debtor, credit limit, inventory storage location, commodity broker,
creditworthiness criteria or designation of Tier I Account Debtor or
Tier II Account Debtor, the Borrower Representative shall make an
initial determination as to their respective identities, levels,
location or criteria, as applicable, subject to the consent of the LC
Agent (which consent shall not be unreasonably withheld). Each such
written notice will supersede and revoke each prior notice relating to
the subject thereof.
"DEBT RATING" means, with respect to a Person, the rating then in
effect by a Rating Agency for the long term senior unsecured non-credit
enhanced debt of such Person.
"DEBTORS" has the meaning set forth in the recitals.
"DEFAULT" means any Event of Default and any default, event or
condition that would, with the giving of any requisite notices and the
passage of any requisite periods of time, constitute an Event of
Default.
"DEFAULT RATE" means a rate per annum equal to (a) in the case of fees
on any Letters of Credit, the rate that otherwise would be applicable
to such fees plus 2% per annum; and (b) in the case of any other
monetary Obligations, the Alternate Base Rate plus 2% per annum.
"DEFICIENCY" has the meaning set forth in Section 2(j)(iv).
"DESIGNATED ASSETS" means the following assets: (i) the MTBE Assets and
(ii) the West Coast Assets.
"DIP BORROWERS" has the meaning set forth in the recitals.
11
"DIP COLLATERAL AGENT" means the Standard Chartered Bank as collateral
agent under the DIP Intercreditor Agreement.
"DIP GUARANTORS" has the meaning set forth in the recitals.
"DIP INTERCREDITOR AGREEMENT" means that certain Intercreditor and
Security Agreement, dated as of October 18, 2002, among the Debtors,
the DIP LC Agent, the DIP LC Participants, SCTSC, the DIP Term Lender
Agent, the DIP Term Lenders and the DIP Collateral Agent.
"DIP LC AGENT" has the meaning set forth in the recitals.
"DIP LC AGREEMENT" has the meaning set forth in the recitals.
"DIP LC ISSUER" has the meaning set forth in the recitals.
"DIP LC PARTICIPANTS" has the meaning set forth in the recitals.
"DIP LETTERS OF CREDIT" means each of the letters of credit issued,
extended or renewed by the DIP LC Issuer under the DIP LC Agreement.
"DIP TERM LENDER AGENT" means Xxxxxx Brothers, Inc. as term lender
agent under the DIP Intercreditor Agreement.
"DIP TERM LENDERS" means those certain lending institutions as term
lenders under the DIP Intercreditor Agreement.
"DISCLOSURE SCHEDULE" means the Disclosure Schedule attached to the
Closing Date Certificate, in form and substance satisfactory to the LC
Agent.
"ELIGIBLE ASSIGNEE" means (i) a commercial bank organized under the
laws of the United States, or any state thereof or (ii) a commercial
bank organized under the laws of any other country which is a member of
the Organization for Economic Cooperation and Development, or a
political subdivision of any such country, provided that such bank is
acting through a branch or agency in the United States, and, in the
case of each of (i) and (ii), has combined capital, surplus and
undivided profits of at least $100,000,000; or (iii) a Person that is
primarily engaged in the business of commercial banking and that is (A)
a Subsidiary of an LC Participant, (B) a Subsidiary of a Person of
which an LC Participant is a Subsidiary, or (C) a Person of which an LC
Participant is a Subsidiary; or (iv) any other commercial bank, savings
and loan association, savings bank, finance company, insurance company,
pension fund, mutual fund investment company, investment fund,
financial institution, or other institutional lender (whether a
corporation, partnership or other entity) acceptable to the LC Agent.
"ELIGIBLE CASH EQUIVALENTS" means Cash Equivalents in which any
Borrower has lawful and absolute title, which are free from any express
or implied at law Lien, trust or other beneficial interest, in which
the Collateral Agent holds a fully perfected first-priority
12
security interest prior to the rights of, and enforceable as such
against, any other Persons pursuant to a Control Agreement.
"ELIGIBLE CRUDE/PRODUCT/LIQUID DELIVERIES" means at the time of any
determination thereof (without duplication), each Account representing
an amount that will be, as reasonably determined in good faith by the
Borrower Representative, an Account of any Borrower with respect to
sales and deliveries of crude oil, refined petroleum products or NGLs
made or committed to be made in each case under a firm written purchase
and sale agreement but for which a Borrower has not yet issued an
invoice to the purchaser, and as to which the following requirements
have been fulfilled to the reasonable satisfaction of the LC Agent:
(i) such Borrower has lawful and absolute title to such Account;
(ii) such Account is a valid, legally enforceable obligation of an
Account Debtor payable in United States or Canadian dollars,
arising from the sale and delivery of crude oil, refined
petroleum products or NGLs to such Person in the United States
of America and/or Canada in the ordinary course of business of
such Borrower, to the extent of the volumes of crude oil,
refined petroleum products or NGLs delivered to such Person
prior to the date of determination;
(iii) there has been excluded from such Account (i) any portion that
is subject to any dispute, rejection, loss, non-conformance,
counterclaim, offset, deduction or other claim or defense on
the part of any Account Debtor or to any claim on the part of
any Account Debtor denying liability under such Account, (ii)
the amount of any account payable or other liability owed by
such Borrower to the Account Debtor on such Account, whether
or not a specific netting agreement may exist, excluding,
however, any portion of any such account payable or other
liability which is at the time in question covered by a Letter
of Credit, limited to the total amount of such Account and
(iii) the amount of any tax liability owed by such Borrower to
any governmental authority with respect to collections on such
Account;
(iv) such Borrower has the full and unqualified right to assign and
grant a security interest in such Account to the Collateral
Agent as security for the Obligations;
(v) such Account (A) represents the uninvoiced amount in respect
of volumes of crude oil, refined petroleum products or NGLs,
title to which was or will be assigned or otherwise
transferred by such Borrower during the month of determination
or the month immediately preceding or immediately following
the month of determination, (B) is governed by an enforceable
purchase and sale agreement and (C) and is not evidenced by
any promissory note or other instrument;
(vi) such Account is not subject to any Lien in favor of any Person
and is subject to a fully perfected first-priority security
interest in favor of the Collateral Agent pursuant to the
Credit Documents, prior to the rights of, and enforceable as
such
13
against, any other Person except for a Lien in respect of
First Purchase Crude Payables;
(vii) such Account will be due not more than 30 days following the
last day of the calendar month in which such Borrower's
invoice will be submitted unless payment thereof is secured by
a letter of credit from an Acceptable Issuer, in form
Currently Approved by the LC Agent;
(viii) such Account is not payable by an Account Debtor with more
than twenty percent (20%) of its Accounts to the Borrowers
that are outstanding more than 60 days from the invoice date;
(ix) the Account Debtor in respect of such Account (i) is located,
is conducting significant business or has significant assets
in the United States of America and/or Canada, (ii) is a
Person Currently Approved by the LC Agent, (iii) is not an
Affiliate of any Borrower (other than another Borrower or a
Guarantor), (iv) is not the subject of any event of the type
described in Section 8(h) and (v) has established a credit
limit with Borrower to whom such Account is owed in an amount
Currently Approved by the LC Agent;
(x) the Account Debtor in respect of such Account is not a
governmental authority, domestic or foreign; and
(xi) such Account is not the obligation of an Account Debtor as to
which the LC Agent determines in good faith that there is a
legitimate concern over the timing or collection of such
obligation.
"ELIGIBLE FIXED ASSETS" means assets (other than, the Designated
Assets) of any Borrower that (i) are included in Property, Plant and
Equipment as reflected in the most current Consolidated balance sheet
of EOTT LLC and its Subsidiaries, (ii) are subject to a fully perfected
first-priority security interest (subject only to Permitted Liens) in
favor of the Collateral Agent pursuant to the Security Documents prior
to the rights of, and enforceable as such against, any other Person and
(iii) have been appraised by an independent appraiser selected by the
LC Agent. At the Closing Date hereof, Eligible Fixed Assets will
include only the assets known as (i) the Mississippi/Alabama pipeline
system and related Mobile terminal, (ii) the Kansas pipelines, (iii)
the Oklahoma pipelines and (iv) the Rockies pipelines (which comprise
of assets located in the states of Colorado, North Dakota, South
Dakota, Wyoming, Montana and Nebraska).
"ELIGIBLE INVENTORY" means inventories of crude oil or NGLs in which
any Borrower has lawful and absolute title (or which are owned by SCTSC
pursuant to the Crude Oil Purchase Agreement), which are (i) not
subject to any Lien in favor of any Person (other than Permitted
Inventory Liens), (ii) subject to a fully perfected first-priority
security interest (subject only to Permitted Inventory Liens) in favor
of the Collateral Agent pursuant to the Credit Documents securing all
the Obligations prior to the rights of, and enforceable as such
against, any other Person, (iii) located in storage locations
(including pipelines) that are either (A) owned by a Credit Party or
(B) Currently Approved by the
14
LC Agent and (iv) otherwise satisfactory to the LC Agent in its sole
discretion in terms of quality, quantity and such other matters as the
LC Agent deems relevant (provided that such inventories shall not be
located in or attributable to any Designated Asset), minus, the amount
of any Permitted Inventory Lien on any such inventory. For the
avoidance of doubt, inventories included in Eligible
Crude/Product/Liquid Deliveries are excluded from Eligible Inventory.
"ELIGIBLE MARGIN DEPOSIT" means the net equity value of investments by
any Borrower in margin deposit accounts with commodities brokers
Currently Approved by the LC Agent on nationally recognized exchanges
subject to a perfected first-priority security interest in favor of the
Collateral Agent or a three-party agreement among Borrower, the
Collateral Agent and the depository institution, in form and substance
satisfactory to the Collateral Agent.
"ELIGIBLE RECEIVABLES" means at the time of any determination thereof
(without duplication, each Account with respect to sales and deliveries
by any Borrower of crude oil or NGLs, and as to which the following
requirements have been fulfilled to the reasonable satisfaction of the
LC Agent:
(i) such Borrower, or SCTSC pursuant to the Receivables Purchase
Agreement, has lawful and absolute title to such Account;
(ii) such Account is a valid, legally enforceable obligation of an
Account Debtor payable in United States or Canadian dollars,
arising from the sale and delivery of crude oil or NGLs to
such Person in the United States of America in the ordinary
course of business of such Borrower, to the extent of the
volumes of crude oil or NGLs delivered to such Person prior to
the date of determination;
(iii) there has been excluded from such Account (i) any portion that
is subject to any dispute, rejection, loss, non-conformance,
counterclaim, offset, deduction or other claim or defense on
the part of any Account Debtor or to any claim on the part of
any Account Debtor denying liability under such Account, (ii)
the amount of any account payable or other liability owed by
such Borrower to the Account Debtor on such Account, whether
or not a specific netting agreement may exist, excluding,
however, any portion of any such account payable or other
liability which is at the time in question covered by a Letter
of Credit and (iii) the amount of any tax liability owed by
such Borrower to any governmental authority with respect to
collections on such Account;
(iv) such Borrower has the full and unqualified right to assign and
grant a security interest in such Account to the Collateral
Agent as security for the Obligations;
(v) such Account is evidenced by an invoice rendered to the
Account Debtor, is governed by a purchase and sale agreement,
exchange agreement or other written agreement and is not
evidenced by any promissory note or other instrument;
(vi) such Account is not subject to any Lien in favor of any Person
and is subject to a fully perfected first-priority security
interest in favor of the Collateral Agent
15
pursuant to the Credit Documents, prior to the rights of, and
enforceable as such against, any other Person except for a
Lien in respect of First Purchase Crude Payables;
(vii) such Account is due not more than 30 days following the last
day of the calendar month in which the crude oil or NGLs
delivery occurred and is not more than 30 days past due
(except that any Account or group of Accounts of a single
Account Debtor, in either case in excess of $500,000 shall be
excluded from Eligible Receivables if not paid within five
days after the original invoice due date);
(viii) such Account is not payable by an Account Debtor with more
than twenty percent (20%) of its Accounts to any Borrower that
are outstanding more than 60 days from the invoice date;
(ix) the Account Debtor in respect of such Account (i) is located,
is conducting significant business or has significant assets
in the United States of America and/or Canada, (ii) is a
Person Currently Approved by the LC Agent , (iii) is not an
Affiliate of Borrower, (iv) is not the subject of any event of
the type described in Section 8(h) and (v) has established a
credit limit with a Borrower in an amount Currently Approved
by the LC Agent;
(x) the Account Debtor in respect of such Account is not a
governmental authority, domestic or foreign; and
(xi) such Account is not the obligation of an Account Debtor as to
which the LC Agent determines in good faith that there is a
legitimate concern over the timing or collection of such
obligation.
"EMPLOYEE TRANSITION AGREEMENT" means that certain employee transition
agreement, dated as of October 7, 2002, by and among the EOTT Parties
and the Enron Parties.
"ENRON" means Enron Corp., an Oregon corporation and
debtor-in-possession in the Enron Bankruptcy Proceedings.
"ENRON BANKRUPTCY PROCEEDINGS" means the actions under the petitions
for relief filed by Enron and certain of its Affiliates under the
Bankruptcy Code in the United States Bankruptcy Court for the Southern
District of New York, In re Enron Corp., et al, jointly administered
under Case No. 01-16034.
"ENRON PARTIES" means Enron, Enron Energy Services, Inc. a Delaware
corporation and a debtor in possession, Enron North America Corp., a
Delaware corporation and debtor in possession, Enron Pipeline Services
Company, a Delaware corporation, EGP Fuels Company, a Delaware
corporation, and Enron Gas Liquids, Inc., a Delaware corporation and a
debtor and a debtor in possession.
"ENRON SETTLEMENT AGREEMENT" means the settlement agreement, dated as
of October 7, 2002, by and among the EOTT Parties, the Enron Parties
and EOTT Energy
16
Corp. settling, among other things, certain claims owed by each of the
EOTT Parties to the Enron Parties.
"ENVIRONMENTAL LAWS" means the Resource Conservation and Recovery Act
("RCRA"), the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 as amended ("CERCLA"), the Superfund Amendments
and Reauthorization Act of 1986 ("XXXX"), the Federal Clean Water Act,
the Federal Clean Air Act, the Toxic Substances Control Act, the
Occupational Safety and Health Act, the Atomic Energy Act of 1954, and
any other federal, state, local or foreign law, statute, treaty,
regulation, ordinance, rule, regulation, order, decree, judgment,
permit, concession, franchise, license, agreement or other governmental
restriction, relating to health, safety or the environment now in
effect or hereafter amended or enacted.
"EOTT CANADA" has the meaning set forth in the preamble.
"EOTT FINANCE CORP." means EOTT Energy Finance Corp., a Delaware
corporation.
"EOTT GP" has the meaning set forth in the preamble.
"EOTT LIQUIDS" has the meaning set forth in the preamble.
"EOTT LLC" has the meaning set forth in the preamble.
"EOTT MLP" has the meaning set forth in the recitals.
"EOTT OLP" has the meaning set forth in the preamble.
"EOTT PARTIES" means the Borrowers and the Guarantors.
"EOTT TERMINAL" means any storage terminal, tankage or facility owned
by any Borrower.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations
promulgated with respect thereto.
"ERISA AFFILIATE" means each Credit Party and all other Persons that,
together with such Credit Party, are treated as a single employer under
Section 414 of the Tax Code.
"ERISA PLAN" means any employee pension benefit plan subject to Title
IV of ERISA maintained by any ERISA Affiliate with respect to which any
Credit Party has a fixed or contingent Liability.
"EVENT OF DEFAULT" means the occurrence of any event described in
Section 8 of this Agreement.
"EXTENSION OF CREDIT" means (i) the issuance of a Letter of Credit or
the amendment of any Letter of Credit having the effect of extending
the stated termination date thereof or
17
increasing the maximum amount available to be drawn thereunder and (ii)
the funding of a participation in an unpaid Matured LC Obligation. The
initial Extensions of Credit shall occur on the Closing Date with the
conversion of the DIP Letters of Credit to Letters of Credit hereunder
pursuant to Section 2(a)(i).
"FACILITY FEE" has the meaning set forth in Section 2(j)(vii).
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/1000th of one percent) equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day;
provided, however, that (i) if the day for which such rate is to be
determined is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business
Day as so published on the next succeeding Business Day and (ii) if
such rate is not so published for any day, the Federal Funds Rate for
such day shall be the average rate quoted to the LC Agent on such day
on such transactions as determined by the LC Agent.
"FINAL ORDER" means an order, judgment or other decree of the
Bankruptcy Court or any other court, judicial body or Tribunal with
proper jurisdiction, as the case may be, which is in full force and
effect and which has not been reversed, stayed, modified or amended and
as to which (i) any right to appeal or seek certiorari, review or
rehearing has been waived or (ii) the time to appeal or seek
certiorari, review or rehearing has expired and as to which no appeal,
position for certiorari, review or rehearing has been filed and is
either pending or has been stayed.
"FIRST PURCHASE CRUDE PAYABLES" means the unpaid amount of any payable
obligation related to the purchase of crude oil by any Borrower that
the LC Agent determines will be secured by a statutory Lien, including
but not limited to the statutory Liens, if any, created under the laws
of Alabama, Arkansas, Colorado, Kansas, Louisiana, Mississippi,
Montana, Nebraska, New Mexico, Xxxxx Xxxxxx, Xxxxxxxx, Xxxxx Xxxxxx,
Xxxxx or any other state to the extent such payable obligation is not
at the time in question covered by a Letter of Credit.
"FISCAL QUARTER" means a three-month period ending on March 31, June
30, September 30 or December 31 of any year.
"FISCAL YEAR" means a twelve-month period ending on December 31 of any
year.
"FIXED PRICE CONTRACT" means a purchase or sale contract for crude oil,
refined petroleum products or NGLs where the price has been fixed.
"FUNDED DEBT" means Indebtedness of a Credit Party described in any of
clauses (i) through (iii) or (v) through (xii) of the definition of
"Indebtedness."
18
"GAAP" means those generally accepted accounting principles and
practices recognized as such by the Financial Accounting Standards
Board (or any generally recognized successor).
"GOVERNING BODY" means the board of directors or other body having the
power to direct or cause the direction of the management and policies
of a Person that is a corporation, partnership, trust or limited
liability company.
"GUARANTORS" has the meaning set forth in the preamble.
"HAZARDOUS MATERIALS" means any substances regulated under any
Environmental Law, whether as pollutants, contaminants or chemicals, as
industrial, toxic or hazardous substances or wastes or otherwise.
"HEDGING CONTRACT" means (i) any agreement providing for options,
swaps, floors, caps, collars, forward sales or forward purchases
involving interest rates, commodities or commodity prices, equities,
currencies, bonds or indexes based on any of the foregoing, (ii) any
option, futures or forward contract traded on an exchange and (iii) any
other derivative agreement or other similar agreement or arrangement,
excluding in the case of subsection (i), (ii) and (iii), for purposes
of Section 7(d) only, any such agreement or contract covering crude
oil, refined oil products or NGLs that is entered into by a Borrower
(A) in the ordinary course of business, (B) in accordance with the then
effective Risk Management Policies and (C) not for speculative
purposes.
"HIGHEST LAWFUL RATE" means, with respect to each Lender Party to whom
Obligations are owed, the maximum nonusurious rate of interest that
such Lender Party is permitted under applicable Law to contract for,
take, charge or receive with respect to such Obligations. All
determinations herein of the Highest Lawful Rate or of any interest
rate determined by reference to the Highest Lawful Rate shall be made
separately for each Lender Party as appropriate to assure that the
Credit Documents are not construed to obligate any Person to pay
interest to any Lender Party at a rate in excess of the Highest Lawful
Rate applicable to such Lender Party.
"INDEBTEDNESS" of any Person means its Liabilities (without
duplication) in any of the following categories:
(i) Liabilities for borrowed money,
(ii) Liabilities constituting an obligation to pay the deferred
purchase price of property or services,
(iii) Liabilities evidenced by a bond, debenture, note or similar
instrument,
(iv) Liabilities that would be required under GAAP to be shown on
such Person's balance sheet as a liability,
(v) Liabilities arising under Hedging Contracts (on a net basis to
the extent netting is provided for in the applicable Hedging
Contract),
19
(vi) Liabilities constituting principal under Capital Leases,
(vii) Liabilities arising under conditional sales or other title
retention agreements,
(viii) Liabilities owing under direct or indirect guaranties of
Liabilities of any other Person or otherwise constituting
obligations to purchase or acquire or to otherwise protect or
insure a creditor against loss in respect of Liabilities of
any other Person (such as obligations under working capital
maintenance agreements, agreements to keep-well or agreements
to purchase Liabilities, assets, goods, securities or
services), but excluding endorsements in the ordinary course
of business of negotiable instruments in the course of
collection,
(ix) Liabilities consisting of an obligation to purchase or redeem
commodities, securities or other property, if such Liabilities
arise out of or in connection with the sale or issuance of the
same or similar commodities, securities or property (for
example, repurchase agreements, mandatorily redeemable
preferred stock and sale/leaseback agreements),
(x) Liabilities with respect to letters of credit or applications
or reimbursement agreements therefor,
(xi) Liabilities with respect to banker's acceptances or
(xii) Liabilities with respect to obligations to deliver goods or
services in consideration of advance payments therefor;
provided, however, that the "INDEBTEDNESS" of any Person shall not
include Liabilities that were incurred in the ordinary course of
business by such Person on ordinary trade terms to vendors, suppliers
or other Persons providing goods and services for use by such Person in
the ordinary course of its business, unless and until such Liabilities
are outstanding more than 120 days after the date the respective goods
are delivered or the respective services are rendered, other than
Liabilities contested in good faith by appropriate proceedings, if
required, and for which adequate reserves are maintained on the books
of such Person in accordance with GAAP.
"INDENTURE TRUSTEE" means The Bank of New York, a New York banking
corporation, or its successor, or such other Person as shall be
acceptable to the LC Agent, in its capacity as indenture trustee under
the Senior Notes Indenture.
"INITIAL FINANCIAL STATEMENTS" means the unaudited Consolidated balance
sheet of EOTT MLP and its Subsidiaries as of December 31, 2002 and the
related Consolidated income statements, statements of cash flows and
partners' capital for the year ended December 31, 2002.
"INTELLECTUAL PROPERTY" means all patents, trademarks, tradenames,
copyrights, technology, software, know-how and processes used in or
necessary for the conduct of the business of the Credit Parties as
currently conducted or anticipated to be conducted
20
that are material to the condition (financial or otherwise), business
or operations of the Credit Parties, taken as a whole.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor and Security
Agreement, dated on or about the Closing Date, among the Credit
Parties, the LC Agent, the LC Participants, SCTSC, the Term Lender
Agent, the Term Lenders and the Collateral Agent, as amended, amended
and restated, supplemented, or otherwise modified from time to time.
"INVESTMENT" means any investment made, directly or indirectly in any
Person, whether by acquisition of shares of capital stock, Indebtedness
or other obligations or securities or by loan, advance, capital
contribution or otherwise and whether made in cash, by the transfer of
property or by any other means.
"IP COLLATERAL" means the Intellectual Property that constitutes
Collateral.
"KPMG" means KPMG L.L.P., acting as financial advisor to the LC Agent's
Special Counsel.
"LAW" means any statute, law, regulation, ordinance, rule, treaty,
judgment, order, decree, permit, concession, franchise, license,
agreement or other governmental restriction of the United States or any
state or political subdivision thereof or of any foreign country or any
department, province or other political subdivision thereof.
"LC AGENT" has the meaning set forth in the preamble.
"LC AGENT'S SPECIAL COUNSEL" means Lovells and Xxxxxxx XxXxxxxxx LLP or
such other counsel as may be approved by the LC Agent.
"LC COLLATERAL" has the meaning set forth in Section 2(e)(i).
"LC CONDITIONS" has the meaning set forth in Section 2(a)(ii).
"LC ISSUER" means Standard Chartered, in its capacity as an issuer of
Letters of Credit hereunder, its successors in such capacity and any
other LC Participant appointed by the LC Agent as an LC Issuer
hereunder in place of or in addition to Standard Chartered; provided,
however, such appointment shall have been approved by the Majority LC
Participants.
"LC OBLIGATIONS" means, as of any date of determination, the sum of all
Matured LC Obligations, plus the Maximum Drawing Amount under all
Letters of Credit then outstanding.
"LC PARTICIPANT SCHEDULE" means Schedule I hereto.
"LC PARTICIPANTS" has the meaning set forth in the preamble.
21
"XXXXXX CREDIT AGREEMENT" means the Term Loan Agreement, dated as of
the date hereof, among the Credit Parties, the Term Lenders and the
Term Lender Agent, as amended, amended and restated, supplemented, or
otherwise modified from time to time evidencing loans from the lenders
thereunder to the Borrowers an aggregate principal amount of
$75,000,000.00.
"LENDER PARTIES" means the LC Agent, the LC Issuer, and each LC
Participant.
"LETTER OF CREDIT" means a letter of credit issued (or deemed issued)
by the LC Issuer hereunder at the application of the Borrower
Representative.
"LETTER OF CREDIT FEE" means, with respect to each Letter of Credit for
each month or a portion thereof while such Letter of Credit remains
outstanding, a fee equal to the product of (i) the Applicable Margin
for Letters of Credit and (ii) the Average Daily Maximum Drawing Amount
thereof.
"LETTER OF CREDIT REQUEST" means a request in the form and substance of
Exhibit A or substantially in such form as the LC Issuer may from time
to time prescribe delivered by the Borrower Representative to the LC
Issuer in accordance with the provisions of this Agreement.
"LIABILITIES" means, as to any Person, all Indebtedness, liabilities
and obligations of such Person, whether matured or unmatured,
liquidated or unliquidated, primary or secondary, direct or indirect,
absolute, fixed or contingent, and whether or not required to be
considered pursuant to GAAP.
"LIEN" means, with respect to any property or assets, any right or
interest therein of a creditor to secure Liabilities owed to it or any
other arrangement with such creditor which provides for the payment of
such Liabilities out of such property or assets or which allows such
creditor to have such Liabilities satisfied out of such property or
assets prior to the general creditors of any owner thereof, including
any lien, mortgage, security interest, pledge, deposit, production
payment, rights of a vendor under any title retention or conditional
sale agreement or lease substantially equivalent thereto, tax lien,
mechanic's or materialman's lien or any other charge or encumbrance for
security purposes, whether arising by law or agreement or otherwise,
but excluding any right of offset that arises without agreement in the
ordinary course of business. "LIEN" also means any filed financing
statement, any registration of a pledge (such as with an issuer of
uncertificated securities) or any other arrangement or action that
would serve to perfect a Lien described in the preceding sentence,
regardless of whether such financing statement is filed, such
registration is made or such arrangement or action is undertaken before
or after such Lien exists.
"MAJORITY LC PARTICIPANTS" means as of any date, (a) if there are two
(2) or fewer LC Participants, all LC Participants and (b) if there are
more than two (2) LC Participants, LC Participants whose aggregate
Percentage Shares equal or exceed sixty-six and two-thirds percent
(66-2/3%).
22
"MARKET PRICE" means, on each day, a spot price for the inventory of
crude oil or NGLs being valued, determined by published prices and
methodology as Currently Approved by the LC Agent at the time of
determination.
"MARKET VALUE OF UNHEDGED ELIGIBLE INVENTORY" means, with respect to
any volume of Unhedged Eligible Inventory, the net proceeds that would
be realized upon an immediate sale thereof for cash at the Market Price
and otherwise on an as-is/where-is basis pursuant to foreclosure of the
Liens thereon in favor of the Collateral Agent.
"MATERIAL ADVERSE CHANGE" means a material and adverse change, from the
state of affairs since December 31, 2002, including any such change
(other than any Permitted Adjustment, in and of itself) that may result
from the settlement, discharge, release or other resolution of, or any
change that may result from any development or event affecting any
matter disclosed in the Disclosure Schedule, or as represented or
warranted in any Credit Document, to (i) EOTT LLC's (or its predecessor
entity's) Consolidated financial condition, operations, properties,
business or prospects, considered as a whole, (ii) the Borrowers'
ability to timely pay the Obligations or (iii) the enforceability of
any Credit Document or any Lien granted pursuant thereto.
"MATURED LC OBLIGATIONS" means all amounts paid by LC Issuer on drafts
or demands for payment drawn or made under or purported to be under any
Letter of Credit and all other amounts due and owing to LC Issuer under
any Letter of Credit Request.
"MATURITY DATE" means the date which is the earlier of (a) eighteen
(18) calendar months after the Closing Date and (b) August 30, 2004.
"MAXIMUM COMMITMENT" means $325,000,000, as such amount may be reduced
from time to time as provided in Section 2.
"MAXIMUM DRAWING AMOUNT" means, at any time, the maximum amounts that
LC Issuer might then or thereafter be called upon to advance under any
Letter of Credit issued by LC Issuer then outstanding (including any
Letter of Credit converted from DIP Letters of Credit) or, if the
context requires, the sum of all such amounts under all such Letters of
Credit.
"MONTHLY PAYMENT DATE" means the first Business Day of each month.
"MOODY'S" means Xxxxx'x Investors Service, Inc., or its successor.
"MTBE ASSETS" means the MTBE facility in Xxxxxx County, Texas and the
Mont Belvieu Storage Facility and Grid in Xxxxxxxx, Xxxxxx and
Galveston Counties, Texas.
"NEW GP INTEREST" means the entire general partner interest in EOTT MLP
following the Effective Date (as defined in the Reorganization Plan) of
the Reorganization Plan.
"NEW LLC UNITS" means the units of member interests in EOTT LLC to be
issued by EOTT LLC pursuant to the Reorganization Plan.
23
"NEW LP INTEREST" means the entire limited partner interest in EOTT MLP
following the Effective Date (as defined in the Reorganization Plan) of
the Reorganization Plan.
"NEW SENIOR NOTES" means the 9% Senior Notes due 2009 in the original
principal amount of up to $104,000,000, together with all
payment-in-kind notes in an aggregate principal amount not to exceed
$10,660,000, in each case issued by EOTT LLC pursuant to the Senior
Notes Indenture and the Reorganization Plan.
"NGLS" means liquid hydrocarbon products extracted from a natural gas
stream, including ethane, propane, normal butane, isobutane and natural
gasoline.
"NYMEX" means the New York Mercantile Exchange.
"NYMEX HEDGED ELIGIBLE INVENTORY" means Eligible Inventory which has
been hedged for delivery within the next 190 days by a contract on the
NYMEX arranged through brokers approved by the LC Agent and with whom a
three-party agreement among any Borrower, the Collateral Agent and such
broker has been entered in form and substance satisfactory to the
Collateral Agent or otherwise hedged in a manner satisfactory to the LC
Agent (it being understood that any such Eligible Inventory which has
been sold to SCTSC pursuant to the Crude Oil Purchase Agreement shall
be included in "NYMEX Hedged Eligible Inventory"). The value of NYMEX
Hedged Eligible Inventory shall be the volume of the inventory times
the Market Price.
"OBLIGATION" means any part of the Obligations.
"OBLIGATIONS" shall mean and include any and all Indebtedness,
Liabilities, and obligations of every kind, nature and description of
each Credit Party to any Lender Party, or any of them, however
evidenced, arising under this Agreement or the other Credit Documents,
whether now existing or hereafter arising, whether direct or indirect,
absolute or contingent, joint and/or several, due or not due, primary
or secondary, liquidated or unliquidated, secured or unsecured, or on
original, renewed or extended terms and whether arising directly or
acquired by LC Participants from any other party to the Credit
Documents (including, without limitation, participations or interests
of any LC Participant in the obligations of any Credit Party to
others), whether incurred by any Credit Party as principal, surety,
endorser, guarantor, accommodation party, indemnitor or otherwise.
"OFFSETTING POSITION" means any offsetting sale or Purchase Agreements,
an offsetting NYMEX contract, an offsetting physical inventory position
(excluding tank bottoms and pipeline linefill inventory classified as a
long term asset and working inventory not held for resale) or an
offsetting swap, collar or option contract, in each case eliminating
price risk and substantially all basis risk.
"OLD SENIOR NOTES" means the 11% Senior Notes due 2009 in the original
principal amount of $235,000,000 issued by EOTT MLP, which shall be
discharged pursuant to the Reorganization Plan.
24
"OPEN POSITION" means, with respect to crude oil inventory or crude oil
purchase or sale contracts, any position that does not have an
Offsetting Position.
"ORGANIZATIONAL DOCUMENTS" means the documents (including Bylaws, if
applicable) pursuant to which a Person that is a corporation,
partnership, trust or limited liability company is organized.
"OTHER HEDGED ELIGIBLE INVENTORY" means Eligible Inventory (other than
NYMEX Hedged Eligible Inventory) which has been hedged with a contract
for physical delivery to a counterparty whose Account would qualify as
a Tier I Eligible Receivable or otherwise hedged in a manner
satisfactory to the LC Agent in its sole discretion (it being
understood that any such Eligible Inventory which has been sold to
SCTSC pursuant to the Crude Oil Purchase Agreement shall be included in
"Other Hedged Eligible Inventory"). The value of Other Hedged Eligible
Inventory shall be the volume of the inventory times the Market Price.
"OTHER PRIORITY CLAIMS" means any account payable, obligation or
liability that the LC Agent has determined has or will have a Lien upon
or claim against any Cash Equivalent, Account or inventory of any
Borrower senior or equal in priority to the security interests in favor
of the Collateral Agent, in each case to the extent such Cash
Equivalent, Account or inventory of any Borrower is otherwise included
in the determination of the Borrowing Base and the included portion
thereof has not already been reduced by such Lien or claim.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PERCENTAGE SHARE" means, with respect to any LC Participant the
percentage obtained by dividing (A) the sum of the Matured LC
Obligations which such LC Participant has funded pursuant to Section
2(c)(ii), plus the portion of the Maximum Drawing Amount which such LC
Participant might be obligated to fund under Section 2(c)(ii) by (B)
the aggregate amount of LC Obligations outstanding at such time. On the
Closing Date, the Percentage Share of each LC Participant shall be as
set forth in the LC Participant Schedule.
"PERMITTED ADJUSTMENTS" means, without duplication, changes to the
financial statements of EOTT LLC and its Consolidated Subsidiaries
resulting solely from:
(i) the bona fide application of "fresh start" accounting
promulgated under SOP 90-7 from time to time in accordance
with GAAP; provided, that in the case of determining
compliance with the covenant set forth in Section 7(q),
application of "fresh start" accounting shall not include the
changes set forth on the schedule of "fresh start" accounting
changes attached to the Closing Date Certificate, but shall
include any other changes resulting solely from the bona fide
application of "fresh start" accounting promulgated under SOP
90-7 from time to time in accordance with GAAP (it being
understood that it is the intent of the parties hereto to
exclude any changes resulting solely from the bona fide
application of "fresh start" accounting in the determination
of covenant compliance in Section 7);
25
(ii) income or expense directly attributable to any Designated
Assets in accordance with GAAP;
(iii) upon the approval of the LC Agent, the cumulative effect of
changes to GAAP;
(iv) gains or losses realized upon the sale of any assets (other
than Designated Assets) not sold in the ordinary course of
business; or
(v) gains or losses realized upon the sale or other disposition of
any Designated Assets, write-ups and write-downs of any
Designated Assets.
"PERMITTED CAPITAL EXPENDITURES" means (a) cash Capital Expenditures
made by EOTT MLP or EOTT LLC, as the case may be, and its consolidated
Subsidiaries that (i) in the aggregate, other than Capital Expenditures
made in connection with the Designated Assets, do not exceed
$12,500,000 during each of the calendar years 2003 and 2004, and (ii)
in the aggregate, for Capital Expenditures made in connection with the
Designated Assets, do not exceed $3,300,000 during each of the calendar
years 2003 and 2004, and (b) cash Capital Expenditures made with the
proceeds from the issuance of additional equity by EOTT LLC for the
purpose of funding any asset acquisition on terms and conditions, and
of an asset, reasonably acceptable to the Majority LC Participants.
"PERMITTED INVENTORY LIENS" means any Lien and the amount of any
Liability secured thereby, on crude oil or NGLs inventory that would be
a Permitted Lien.
"PERMITTED INVESTMENTS" means (i) Cash Equivalents, (ii) Investments
described in the Disclosure Schedule, and (iii) Investments by EOTT LLC
or any of its Subsidiaries in any Wholly Owned Subsidiary of EOTT LLC
that is a Borrower or a Guarantor.
"PERMITTED LIEN" shall mean any of the following:
(i) pledges or deposits of cash or securities under worker's
compensation, unemployment insurance or other social security
legislation or deposits with insurers to cover self-retention
obligations under employee life or medical insurance programs;
(ii) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord's or other like Liens (including,
without limitation, Liens on property of any Credit Party in
the possession of storage facilities, pipelines or barges)
arising in the ordinary course of business for amounts that
are not more than 60 days past due or the validity of which is
being contested in good faith and by appropriate proceedings,
if necessary, and for which adequate reserves are maintained
on the books of any Credit Party in accordance with GAAP;
(iii) Liens under or with respect to accounts with brokers or
counterparties with respect to the following commodity
accounts maintained by EOTT OLP with Refco, L.L.C.: Account
Nos. 1725 43979; 1725 72336; and L610 54999 (for transactions
effected with or through United Energy, Inc.), consisting of
cash,
26
commodities or futures contracts, options, securities,
instruments and other like assets;
(iv) deposits of cash or securities to secure the performance of
bids, trade contracts (other than for borrowed money), leases,
statutory or regulatory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(v) Liens in respect of existing Capital Leases described in the
Disclosure Schedule and such other leases, but encumbering
only the property under lease;
(vi) statutory Liens related to the purchase of crude oil by a
Borrower in the ordinary course of business;
(vii) Liens permitted by the Security Documents;
(viii) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in
good faith and by appropriate proceedings, if necessary, and
for which adequate reserves are maintained on the books of any
Credit Party in accordance with GAAP;
(ix) easements, rights-of-way, restrictions, minor defects and
irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the
business of any Credit Party;
(x) Liens securing purchase money financing for any property or
asset hereafter acquired; and
(xi) Liens provided for in the Reorganization Plan, granted by the
Person, in the assets, and securing the Indebtedness, listed
on as set forth on Schedule 1(a) to the Disclosure Schedule.
"PERSON" means an individual, corporation, partnership, limited
liability company, association, joint stock company, trust or trustee
thereof, estate or executor thereof, unincorporated organization or
joint venture, Tribunal or any other legally recognizable entity.
"POST-CONFIRMATION PROJECTIONS" shall have the meaning set forth in
Section 2(f)(i)(12).
"PREPETITION AGENT" has the meaning set forth in the recitals.
"PREPETITION BORROWERS" has the meaning set forth in the recitals.
"PREPETITION CREDIT AGREEMENT" has the meaning set forth in the
recitals.
"PREPETITION LC ISSUER" has the meaning set forth in the recitals.
"PREPETITION LENDERS" has the meaning set forth in the recitals.
27
"PRESCRIBED FORMS" has the meaning set forth in Section 3(g)(iii).
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in
the opinion of the LC Agent, desirable in order to create or perfect
Liens on any Intellectual Property that constitutes Collateral.
"PURCHASE AGREEMENTS" means, collectively, the Crude Oil Purchase
Agreement and the Receivables Purchase Agreement.
"RATING AGENCY" means either S&P or Xxxxx'x.
"RECEIVABLES PURCHASE AGREEMENT" means that certain Second Amended and
Restated Receivables Purchase Agreement, dated as of the date hereof,
by and among SCTSC and EOTT OLP (as amended, amended and restated,
supplemented or otherwise modified from time to time).
"REFERENCE PERIOD" means, (a) for the period ending January 31, 2003,
the calendar month ending January 31, 2003, (b) for the period ending
February 28, 2003, the period of two consecutive calendar months ending
on such date, (c) for the period ending March 31, 2003, the period of
three consecutive calendar months ending on such date and (d) for a
period ending as of any other date, the period of four (4) consecutive
calendar months ending on such date (in each case treated as a single
accounting period).
"REGISTER" has the meaning set forth in Section 12(e).
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect.
"REIMBURSABLE TAXES" has the meaning set forth in Section 3(g)(i).
"RELEASE" has the meaning given such term in 42 U.S.C.
Section 9601(22).
"REORGANIZATION PLAN" means that Third Amended Joint Chapter 11 Plan of
the Debtors, dated December 6, 2002, and filed with the Bankruptcy
Court in connection with the Cases.
"RISK MANAGEMENT POLICIES" means, with respect to any Borrower, such
risk management procedures and internal controls and such trading
policies with such Open Position limits, with such changes thereto in
effect at any time after the Closing Date, as are then currently
approved by the EOTT LLC board of directors.
"S&P" means Standard & Poor's Ratings Group (a division of McGraw Hill,
Inc.) or its successor.
"SCTSC" means, Standard Chartered Trade Services Corporation, a
Delaware corporation, as purchaser under the Purchase Agreements.
28
"SECURED PARTIES" shall have the meaning set forth in the Intercreditor
Agreement.
"SECURITY" means any rights, properties or interests of any Lender
Party and the Collateral Agent under the Credit Documents, which
provide recourse or other benefits to any Lender Party or the
Collateral Agent in connection with the Obligations or the non-payment
or non-performance thereof, including any Collateral, guaranties of the
payment of any Obligation, bonds, surety agreements, keep-well
agreements, letters of credit, rights of subrogation, rights of offset
and other rights provided for thereunder.
"SECURITY DOCUMENTS" means the Intercreditor Agreement, the instruments
listed in the Security Schedule and all other security agreements,
deeds of trust, mortgages, chattel mortgages, pledges, guaranties,
financing statements, continuation statements, extension agreements,
Control Agreements and other agreements or instruments now, heretofore
or hereafter delivered by any Credit Party to the Collateral Agent in
connection with this Agreement or any transaction contemplated hereby
to secure or guarantee the payment of any part of the Obligations or
the performance of any Credit Party's other duties and obligations
under the Credit Documents.
"SECURITY SCHEDULE" means the Security Schedule attached to the Closing
Date Certificate, in form and substance satisfactory to the LC Agent.
"SENIOR NOTES INDENTURE" means that certain indenture or those certain
indentures, each dated on or about the Closing Date, among EOTT LLC,
EOTT Finance Corp., the Subsidiary Guarantors (as defined therein), and
the Indenture Trustees, pursuant to which EOTT LLC will issue the New
Senior Notes.
"STANDARD CHARTERED" has the meaning set forth in the preamble.
"SUBSIDIARY" means, with respect to any Person, any corporation,
association, partnership, limited liability company, joint venture or
other business or corporate entity, enterprise or organization which is
directly or indirectly (through one or more intermediaries) controlled
or owned more than 50% by such Person.
"SYNDICATION LETTER" means the letter agreement among the Credit
Parties, Standard Chartered Bank and SCTSC, dated the Closing Date,
addressing certain issues regarding the syndication of the financing
provided under this Agreement, the Crude Oil Purchase Agreement and the
Receivables Purchase Agreement.
"SYNTHETIC LEASE" means, as applied to any Person, any lease (including
leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) (a) that is not a Capital
Lease and (b) in respect of which the lessee retains or obtains
ownership of the property so leased for federal income tax purposes,
other than any such lease under which that Person is the lessor.
"TAX CODE" means the Internal Revenue Code of 1986, as amended from
time to time, together with all rules and regulations promulgated with
respect thereto.
29
"TEN-DAY WAITING PERIOD" means the period of time beginning on the date
that the aggregate amount of drawings on Letters of Credit during a
calendar month exceeds $15,000,000 and ending on the date which is the
earlier of (a) ten days from such date and (b) the date that the Term
Lender Agent, as directed by the Majority Term Lenders (as defined in
the Xxxxxx Credit Agreement), gives notice to the Collateral Agent that
they do or do not elect to designate such drawings in excess of
$15,000,000 as a Triggering Event (as defined in the Intercreditor
Agreement).
"TERM LENDER AGENT" means Xxxxxx Brothers Inc., as agent for the Term
Lenders under the Xxxxxx Credit Agreement.
"TERM LENDERS" means the lenders under the Xxxxxx Credit Agreement.
"TERMINATION DECLARATION DATE" means the earliest to occur of (i) the
date on which the LC Agent declares all Obligations to be due and
payable on account of an Event of Default, (ii) the date on which the
LC Agent declares a termination, reduction or restriction of any
further commitment to extend credit to the Borrowers on account of an
Event of Default, and (iii) the Maturity Date.
"TERMINATION EVENT" means (i) the occurrence with respect to any ERISA
Plan of (A) a reportable event described in Sections 4043(c)(5) or (6)
of ERISA or (B) any other reportable event described in Section 4043(c)
of ERISA other than a reportable event not subject to the provision for
30-day notice to the Pension Benefit Guaranty Corporation pursuant to a
waiver by such corporation under Section 4043(a) of ERISA, (ii) the
withdrawal of any ERISA Affiliate from an ERISA Plan during a plan year
in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, (iii) the filing of a notice of intent to
terminate any ERISA Plan or the treatment of any ERISA Plan amendment
as a termination under Section 4041 of ERISA, (iv) the institution of
proceedings to terminate any ERISA Plan by the Pension Benefit Guaranty
Corporation under Section 4042 of ERISA or (v) any other event or
condition that might constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any
ERISA Plan.
"TIER I ACCOUNT DEBTOR" means a Person (i) whose Debt Rating is either
at least Baa3 by Xxxxx'x or at least BBB- by S&P, (ii) whose commercial
paper is rated A-1 by S&P or P-1 by Xxxxx'x or (iii) which is Currently
Approved by the LC Agent as a Tier I Account Debtor.
"TIER I ELIGIBLE CRUDE/PRODUCT/LIQUID DELIVERIES" means each Eligible
Crude/Product/Liquid Delivery (i) to a Tier I Account Debtor; (ii)
fully and unconditionally guaranteed as to payment by a Person whose
Debt Rating is either at least Baa3 by Xxxxx'x or at least BBB- by S&P;
or (iii) fully covered by a letter of credit from an Acceptable Issuer,
in form Currently Approved by the LC Agent (it being understood that
any Account which has been sold to SCTSC pursuant to the Receivables
Purchase Agreement shall be included in "Tier I Eligible
Crude/Product/Liquid Deliveries") .
30
"TIER I ELIGIBLE RECEIVABLES" means each Eligible Receivable (i) from a
Tier I Account Debtor; (ii) fully and unconditionally guaranteed as to
payment by a Person whose Debt Rating is either at least Baa3 by
Xxxxx'x or at least BBB- by S&P or whose commercial paper is rated A-1
by S&P or P-1 by Xxxxx'x; or (iii) fully covered by a letter of credit
from an Acceptable Issuer, in form Currently Approved by the LC Agent.
"TIER II ACCOUNT DEBTOR" means a Person Currently Approved by the LC
Agent as a Tier II Account Debtor.
"TIER II ELIGIBLE CRUDE/PRODUCT/LIQUID DELIVERIES" means each Eligible
Crude/Product/Liquid Delivery to a Tier II Account Debtor.
"TIER II ELIGIBLE RECEIVABLES" means each Eligible Receivable from a
Tier II Account Debtor.
"TRIBUNAL" means any government, any arbitration panel, any court or
any governmental department, commission, board, bureau, agency or
instrumentality of the United States of America or any state, province,
commonwealth, nation, territory, possession, county, parish, town,
township, village or municipality, whether now or hereafter constituted
or existing.
"UCC" means the Uniform Commercial Code as in effect in the State of
New York.
"U.C.P." means the Uniform Customs and Practice for Documentary Credits
(1993 revision), International Chamber of Commerce Publication No. 500,
or any subsequent revision thereof.
"UNDRAWN PRODUCT PURCHASE LETTERS OF CREDIT" means, on any day, the
aggregate amount of all underlying product purchase obligations
supported by one or more Letters of Credit. As used herein, "underlying
product purchase obligation" means all existing unpaid obligations of a
Borrower to the beneficiary of such Letter of Credit in respect of
crude oil, refined petroleum products or NGLs that such Borrower is
obligated to purchase or receive or has then nominated to purchase or
receive and such beneficiary is obligated to sell or deliver, in each
case pursuant to an enforceable purchase and sale or exchange
agreement. For the avoidance of doubt, any such crude oil, refined
petroleum products or NGLs are excluded from Eligible Inventory and
Eligible Crude/Product/Liquid Deliveries.
"UNHEDGED ELIGIBLE INVENTORY" means Eligible Inventory other than NYMEX
Hedged Eligible Inventory and Other Hedged Eligible Inventory (it being
understood that any such Eligible Inventory which has been sold to
SCTSC pursuant to the Crude Oil Purchase Agreement shall be included in
"Unhedged Eligible Inventory").
"WEST COAST ASSETS" means the gas processing, storage and
transportation facilities at Tupnam, Xxxx County, California.
"WHOLLY OWNED SUBSIDIARY" means any Subsidiary of a Person, all of the
issued and outstanding stock, limited liability company membership
interests or partnership interests
31
of which (including all rights or options to acquire such stock or
interests) are directly or indirectly (through one or more
Subsidiaries) owned by such Person, excluding any general partner
interests owned by EOTT GP in any such Subsidiary that is a
partnership, such general partner interests not to exceed two percent
(2%) of the aggregate ownership interests of any such partnership and
directors' qualifying shares if applicable.
2. THE LETTERS OF CREDIT.
(a) General
(i) From and after the Closing Date, all reimbursement
obligations in respect of the DIP Letters of Credit issued pursuant to
the DIP LC Agreement shall constitute reimbursement obligations in
respect of Letters of Credit issued hereunder and all DIP Letters of
Credit shall be deemed to be Letters of Credit issued hereunder (and
any and all fees accrued but not yet payable as of the Closing Date
under the DIP LC Agreement shall be deemed accrued fees under this
Agreement, and shall continue to accrue and become due and payable
pursuant to the terms hereof) and shall be treated as Letters of Credit
hereunder for all purposes.
(ii) Subject to the terms and conditions hereof and in the
manner set forth in Section 2(b), the Borrowers may request LC Issuer
to issue, amend or extend the expiration date of, one or more Letters
of Credit; provided, however, that:
(1) taking such Letter of Credit into account,
the aggregate LC Obligations do not at such
time exceed the lesser of (A) the Maximum
Commitment and (B) the Borrowing Base;
(2) the expiration date of such Letter of Credit
is prior to the earlier of (A) 70 days after
the date such Letter of Credit is to be
issued, or such longer period (not to exceed
365 days) as may be approved by the Majority
LC Participants and (B) the Maturity Date;
(3) the issuance of any Letter of Credit is in
compliance with all applicable governmental
restrictions, policies and guidelines and
will not subject LC Issuer to any cost that
is not reimbursable under Section 3;
(4) such Letter of Credit is (A) issued at a
Borrower's application for the benefit of
(i) its crude oil suppliers and other
vendors related to the purchase or exchange
by any Borrower of crude oil or NGLs or
other business purposes, (ii) SCTSC, (iii)
Enron pursuant to Section 6 of the Enron
Settlement Agreement, (iv) the purchaser of
any Designated Assets to secure the payment
of any indemnity or holdback in connection
with the sale of such Designated Assets or
(v) any other party as otherwise agreed to
by the LC Agent, (B) in a form and with
terms as is usual and customary for letters
of credit issued by LC Issuer and shall be
acceptable to LC Issuer in
32
its sole and absolute discretion and
Currently Approved by the LC Agent and (C)
issued on a Business Day; and
(5) all other conditions in this Agreement to
the issuance of such Letter of Credit have
been satisfied.
LC Issuer will honor any such request if the foregoing conditions (1)
through (5) (in the following Section (b) referred to as the "LC
CONDITIONS") have been met as of the date of issuance, amendment or
extension of such Letter of Credit.
(b) Requesting Letters of Credit. The Borrower
Representative shall deliver a Letter of Credit Request to the LC Issuer for any
Letter of Credit at least one Business Day before the date of issuance of such
Letter of Credit. Delivery of each such request to the LC Issuer, unless
otherwise expressly stated therein, shall be deemed a representation and
warranty by the Borrowers that the LC Conditions described in Section (a) will
be met as of the date of issuance of such Letter of Credit. Each such written
request for a Letter of Credit shall be made in writing in substantially the
form of Exhibit A, the terms and provisions of which are hereby incorporated
herein by reference (or in such other form as may mutually be agreed upon by LC
Issuer and the Borrower Representative). If all LC Conditions for a Letter of
Credit have been met as described in Section (a) on the date requested for the
issuance thereof (i) before 11:00 a.m., New York, New York time, LC Issuer will
issue such Letter of Credit on such date at LC Issuer's Applicable Lending
Office and (ii) on or after 11:00 a.m., New York, New York time, LC Issuer will
issue such Letter of Credit on the next succeeding Business Day at LC Issuer's
Applicable Lending Office. If any provisions of any Letter of Credit Request
conflict with any provisions of this Agreement, the provisions of this Agreement
shall govern and control.
(c) Reimbursement and Participations
(i) Each Matured LC Obligation shall constitute a loan by
LC Issuer to Borrowers. Borrowers agree on a joint and several basis to
pay to the Collateral Agent, for the benefit of the LC Issuer, on
demand but subject to a deferral of such payment as required by Section
3.2(d) of the Intercreditor Agreement, the full amount of each Matured
LC Obligation, together with interest thereon (A) at the Alternate Base
Rate to and including the second Business Day after the Matured LC
Obligation is incurred and (B) at the Default Rate on each day
thereafter. All such funds received by the Collateral Agent from the
Borrowers shall be applied in accordance with the Cash Waterfall.
(ii) LC Issuer irrevocably agrees to grant and hereby
grants to each LC Participant, and, to induce LC Issuer to issue
Letters of Credit hereunder, each LC Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from LC Issuer, on
the terms and conditions hereinafter stated and for such LC
Participant's own account and risk an undivided interest equal to such
LC Participant's Percentage Share of LC Issuer's obligations and rights
under each Letter of Credit issued hereunder and the amount of each
Matured LC Obligation paid by LC Issuer thereunder. Each LC Participant
unconditionally and irrevocably agrees that, if a Matured LC Obligation
is paid under any Letter of Credit for which LC Issuer is not
reimbursed in full by Borrowers in accordance with the terms of this
Agreement and the related Letter of
33
Credit Request (including by the application of LC Collateral), such LC
Participant shall (in all circumstances and without set-off or
counterclaim) pay to LC Issuer on demand, in immediately available
funds at LC Issuer's address for notices hereunder, such LC
Participant's Percentage Share of such Matured LC Obligation (or any
portion thereof that has not been reimbursed by Borrowers). Each LC
Participant's obligation to pay LC Issuer pursuant to the terms of this
subsection is irrevocable and unconditional. If any amount required to
be paid by any LC Participant to an LC Issuer pursuant to this
subsection is paid by such LC Participant to LC Issuer within three
Business Days after the date such payment is due, LC Issuer shall in
addition to such amount be entitled to recover from such LC
Participant, on demand, interest thereon calculated from such due date
at the Federal Funds Rate. If any amount required to be paid by any LC
Participant to an LC Issuer pursuant to this subsection is not paid by
such LC Participant to LC Issuer within three Business Days after the
date such payment is due, LC Issuer shall in addition to such amount be
entitled to recover from such LC Participant, on demand, interest
thereon calculated from such due date at the Alternate Base Rate.
(iii) Whenever an LC Issuer has in accordance with
subsection (ii) above received from any LC Participant payment of such
LC Participant's Percentage Share of any Matured LC Obligation, if LC
Issuer thereafter receives any payment of such Matured LC Obligation,
or any payment of interest thereon (whether directly from the Borrowers
or by application of proceeds of LC Collateral or otherwise, and
excluding only interest for any period prior to LC Issuer's demand that
such LC Participant make such payment of its Percentage Share), LC
Issuer shall distribute to such LC Participant its Percentage Share of
the amounts so received by LC Issuer; provided, however, that if any
such payment received by LC Issuer must thereafter be returned by LC
Issuer, such LC Participant shall return to LC Issuer the portion
thereof that LC Issuer has previously distributed to it.
(iv) A written advice setting forth in reasonable detail
the amounts owing under this Section, submitted by the LC Issuer to any
Borrower or any LC Participant from time to time, shall be conclusive,
absent manifest error, as to the amounts thereof.
(d) No Duty to Inquire
(i) LC Issuer is authorized and instructed to accept and
pay drafts and demands for payment under any Letter of Credit without
requiring, and without responsibility for, any determination as to the
existence of any event giving rise to such draft, either at the time of
acceptance or payment or thereafter. LC Issuer is under no duty to
determine the proper identity of anyone presenting such a draft or
making such a demand (whether by tested telex or otherwise) as the
officer, representative or agent of any beneficiary under any Letter of
Credit, and payment by LC Issuer to any such beneficiary when requested
by any such purported officer, representative or agent is hereby
authorized and approved. Each Borrower releases each LC Participant
from, and agrees to hold each LC Participant harmless and indemnified
against, any liability or claim in connection with or arising out of
the subject matter of this Section, WHICH INDEMNITY SHALL APPLY WHETHER
OR NOT ANY SUCH LIABILITY OR CLAIM IS IN ANY WAY OR TO ANY EXTENT
CAUSED, IN WHOLE OR IN
34
PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY SUCH LENDER
PARTY; provided, however, only that no LC Participant shall be entitled
to indemnification for that portion, if any, of any liability or claim
which is proximately caused by its own individual gross negligence or
willful misconduct, as determined in a final judgment.
(ii) If the maturity of any Letter of Credit is extended
by its terms or by Law or governmental action, if any extension of the
maturity or time for presentation of drafts or any other modification
of the terms of any Letter of Credit is made at the request of the
Borrower Representative, or if the amount of any Letter of Credit is
increased at the request of the Borrower Representative, this Agreement
shall be binding upon all Credit Parties with respect to such Letter of
Credit as so extended, increased or otherwise modified, with respect to
drafts and property covered thereby and, with respect to any action
taken by LC Issuer, LC Issuer's correspondents or any LC Participant in
accordance with such extension, increase or other modification.
(iii) If any Letter of Credit provides that it is
transferable, LC Issuer shall have no duty to determine the proper
identity of anyone appearing as transferee of such Letter of Credit,
nor shall LC Issuer be charged with responsibility of any nature or
character for the validity or correctness of any transfer or successive
transfers, and payment by LC Issuer to any purported transferee or
transferees as determined by LC Issuer is hereby authorized and
approved, and Borrowers release each LC Participant from and agrees to
hold each LC Participant harmless and indemnified against, any
liability or claim in connection with or arising out of the foregoing,
WHICH INDEMNITY SHALL APPLY WHETHER OR NOT ANY SUCH LIABILITY OR CLAIM
IS IN ANY WAY OR TO ANY EXTENT CAUSED, IN WHOLE OR IN PART, BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY SUCH LENDER PARTY; provided,
however, only that no LC Participant shall be entitled to
indemnification for that portion, if any, of any liability or claim
which is proximately caused by its own individual gross negligence or
willful misconduct, as determined in a final judgment.
(e) LC Collateral
(i) If, after the making of all mandatory prepayments
required under Section 2(h), the outstanding LC Obligations to the LC
Issuer will exceed (a) the lesser of (1) the Borrowing Base and (2) the
Maximum Commitment, Borrowers will immediately pay to the Collateral
Agent an amount equal to such excess. In accordance with the
Intercreditor Agreement, the Collateral Agent will hold such amount as
collateral security for the remaining LC Obligations held by the LC
Issuer (all such amounts held as collateral security for such LC
Obligations being herein collectively referred to as the "LC
COLLATERAL") and the other Obligations, and such collateral may be
applied from time to time in accordance with the Cash Waterfall to pay
the Matured LC Obligations of the LC Issuer.
(ii) If the Obligations or any part thereof (a) become
immediately due and payable pursuant to Section 9 or (b) remain
outstanding on the Maturity Date (unless this Agreement is extended on
terms acceptable to the Lender Parties), then, unless all LC
35
Participants otherwise specifically elect to the contrary (which
election may thereafter be retracted by such LC Participants at any
time), all LC Obligations shall become immediately due and payable
without regard to whether or not actual drawings or payments on the
Letters of Credit have occurred, and Borrowers shall be obligated to
pay to the Collateral Agent immediately an amount equal to the
aggregate LC Obligations that are then outstanding, plus an additional
amount acceptable to the LC Agent, to be held as LC Collateral.
(f) Conditions Precedent to Extensions of Credit
(i) Initial Extensions of Credit. Neither any LC
Participant nor the LC Issuer shall have any obligation to make the
initial Extension of Credit unless the following conditions precedent
have, in the determination of the LC Agent, been satisfied or waived by
the LC Agent:
(1) Reorganization Plan. The Reorganization Plan and all
amendments, modifications, revisions and restatements
thereof, if any, shall have been delivered to the LC
Agent and shall be in form and substance satisfactory
to the LC Agent (in such form approved by the LC
Agent, the "APPROVED PLAN"). Except as set forth in
modification motions filed with the Bankruptcy Court
and served upon and approved by the LC Agent, there
shall have been no modifications, amendments,
revisions or restatements of the Approved Plan. Any
representation or warranty made by any DIP Credit
Party in the Approved Plan shall be accurate, true,
correct and complete in all material respects as of
the Closing Date. All conditions precedent to the
effectiveness of the Approved Plan shall have been
satisfied pursuant to Article 18 of the
Reorganization Plan and the Approved Plan shall have
achieved substantial completion as described in
Section 17.1 of the Reorganization Plan.
(2) Confirmation Order. The Confirmation Order shall have
been delivered to the LC Agent and shall be in form
and substance satisfactory to the LC Agent. The
Confirmation Order shall have been entered by the
Bankruptcy Court, shall be a Final Order and the LC
Agent shall have received evidence satisfactory to it
demonstrating such fact.
(3) Release of Claims. All prior claims against each
present and former party (other than any Credit Party
or predecessor entity thereto) to the DIP LC
Agreement (and their agents, representatives,
affiliates, professionals, etc.) shall have been
released and waived by each Credit Party, which
releases and waivers shall be in form and substance
satisfactory to the LC Agent in its sole discretion.
(4) Termination of DIP LC Agreement. The DIP LC Agreement
shall have been terminated, and all amounts owing
thereunder shall have been repaid in full in cash (or
deemed to be accrued and outstanding under this
36
Agreement) and all DIP Letters of Credit shall be
deemed to be Letters of Credit issued hereunder.
(5) Purchase Agreements. Each of the Purchase Agreements
shall have been executed by the Borrowers and SCTSC,
shall be in full force and effect and shall be in
form and substance satisfactory to the LC Agent.
(6) Fees and Expenses. Borrowers shall have paid to the
LC Agent, for the account of the LC Participants or
the LC Agent, as applicable, all fees and expenses to
be paid on the Closing Date.
(7) Credit Documents. Each of the Credit Documents shall
have been duly executed and delivered by the
respective Credit Parties thereto, shall be in full
force and effect and shall be in form and substance
satisfactory to the LC Agent. All Schedules to this
Agreement and each other Credit Document shall be
complete and satisfactory in form and substance to
the LC Agent. Each LC Participant shall have received
a fully executed copy of each such document.
(8) Xxxxxx Credit Agreement. The Xxxxxx Credit Agreement
shall have been executed by each of the respective
parties thereto, shall be in full force and effect
and shall be in form and substance satisfactory to
the LC Agent. All the conditions precedent to
extension of credit under the Xxxxxx Credit Agreement
shall have been, or concurrently be, satisfied.
(9) Governmental and Third-Party Approvals; Judgments,
Etc. All necessary governmental and all material
third-party approvals and/or consents, as the case
may be, in connection with the consummation of the
Reorganization Plan, the Credit Documents and the
transaction contemplated therein, shall have been
obtained and remain in full force and effect, subject
to no unsatisfied conditions, and all applicable
waiting periods shall have expired without any action
being taken by any competent authority which
restrains, prevents or imposes materially adverse
conditions upon the consummation of the
Reorganization Plan, any Credit Document, or any of
the transactions contemplated therein. In addition,
there shall not exist any judgment, order, injunction
or other restraint prohibiting or imposing materially
adverse conditions on the consummation or performance
of this Agreement, any other Credit Document or any
of the transactions contemplated therein.
(10) Financial Statements. To the extent not previously
received, the LC Agent shall have received (A) the
Initial Financial Statements certified by the chief
financial officer of EOTT LLC as accurately
reflecting the financial position of the Credit
Parties as of the date of, and for the periods
covered by, such financial statements (subject to
changes resulting from normal and recurring
adjustments made in conformity with GAAP) and (B)
such
37
receivables analyses as the LC Agent shall request,
in each case in form and substance satisfactory to
the LC Agent.
(11) Financial Condition. No Material Adverse Change shall
have occurred since December 31, 2002. The LC Agent
shall be satisfied in all respects with the projected
amount of available cash, Cash Equivalents, other
credit lines (on terms and conditions satisfactory to
the LC Agent, other than credit extended pursuant to
this Agreement, the Xxxxxx Credit Agreement, the New
Senior Notes or the Purchase Agreements) or other
sources of liquidity acceptable to the LC Agent,
available to the Credit Parties during each period
from the Closing Date through the Maturity Date.
(12) Disclosure Schedule; Closing Date Certificate. Not
less than five (5) Business Days prior to the Closing
Date, the LC Agent shall have received the Disclosure
Schedule, which shall be satisfactory in form and
substance to the LC Agent in its sole discretion. In
addition, the LC Agent shall have received a
certificate of an executive officer of EOTT LLC
attaching thereto, and (A) certifying that as of the
Closing Date such projections, business plans,
budgets and statements are their best estimate of
such matters: (1) financial projections regarding the
Credit Parties in form and substance satisfactory to
the LC Agent in its sole and absolute discretion for
the period commencing January 1, 2003 and ending
September 30, 2004 (collectively, the
"POST-CONFIRMATION PROJECTIONS") with respect to
which the LC Agent shall be satisfied with the
accounting practices and procedures utilized by the
Credit Parties in connection with such
Post-Confirmation Projections, (2) a business and
financial plan for EOTT LLC (in form and detail
satisfactory to the LC Agent), prepared or caused to
be prepared by a senior financial officer thereof,
setting forth for Fiscal Years 2003 and 2004, (a)
monthly balance sheets, income statements and
statements of cash flows for the following year,
including the availability projections and plans for
personnel, capital expenditures and facilities, and
(b) a statement of the material assumptions on which
such plan is based (collectively, the "BUSINESS
PLAN"), (3) the initial Cash Budget, which shall be
in form and substance satisfactory to the LC Agent,
and (4) a statement (which may be unaudited) in
detail satisfactory to the LC Agent of changes to the
financial statements of EOTT LLC and its Consolidated
Subsidiaries anticipated to result from the
application of "fresh start" accounting that have
been reflected in the Post-Confirmation Projections,
which shall be satisfactory to the LC Agent, and (B)
certifying as true and correct as of the Closing
Date, (1) the Security Schedule, setting forth the
Security Documents, which schedule shall be
satisfactory to the LC Agent, (2) the Disclosure
Schedule referred to in the first sentence of this
Section 2(f)(i)(12) and (3) a schedule of all DIP
Letters of Credit outstanding as of the Closing Date,
showing the undrawn face amount, the beneficiary, the
termination date and the
38
amount of any accrued and unpaid interest or fees
thereon under the DIP LC Agreement, subject to
confirmation by the LC Agent.
(13) Solvency Certificate. The LC Participants shall have
received an officer's certificate of EOTT LLC dated
as of the Closing Date as to the solvency of each of
the Credit Parties following the consummation of the
transactions contemplated herein, in form and
substance satisfactory to the LC Agent.
(14) Licenses, Etc. All franchises, licenses, permits,
certifications, accreditation and other rights,
consents and approvals which are necessary for the
operations of the Credit Parties' respective business
(after giving effect to the transactions contemplated
hereby) shall have been obtained and shall be in full
force and effect, and all necessary applications for
renewals pertaining thereto shall have been submitted
to the proper issuing governmental authority or
Tribunal.
(15) Labor and Employee Agreements. All labor and related
employee agreements and liabilities, and all pension
and other employee benefit plans and liabilities of
the Credit Parties, after giving effect to the
Reorganization Plan, shall be satisfactory to the LC
Agent.
(16) Reorganization of Corporate Structure. The LC Agent
shall have received evidence which shall be
satisfactory to the LC Agent that (A) EOTT LLC shall
have been formed as a limited liability company under
Delaware state law, (B) all necessary action shall
have been taken by EOTT MLP to transfer all of its
equity interest in EOTT GP to EOTT LLC and (C) all
necessary action shall have been taken to authorize
and issue the New GP Interest to EOTT GP and the New
LP Interest to EOTT LLC.
(17) Documentation Regarding New Senior Notes. The Old
Senior Notes shall have been cancelled in accordance
with the terms and conditions of the Reorganization
Plan. The Senior Notes Indenture shall have been
executed by the respective parties thereto,
substantially in the form delivered to the LC Agent
prior to the date hereof, with only such changes as
shall be acceptable to the LC Agent, and each of the
representations, covenants, events of default (and
any remedies arising as a result thereof) and other
provisions shall as determined by the LC Agent be
substantially identical to those contained in the
indenture and the other documents evidencing or
relating to the Old Senior Notes, or otherwise
acceptable to the LC Agent.
(18) Equity Structure and Corporate Governance. All
aspects of the equity ownership and corporate and
operational governance of the Credit Parties
(including the composition of each Credit Party's
respective Governing Body and other management and
the terms of any management agreements), to the
extent not expressly set forth in the Reorganization
39
Plan or referred to in clause (16) of this Section
2(f), shall be satisfactory to the LC Agent. In
addition, LC Agent shall have been provided with true
and correct copies of all documents with respect to
the Credit Parties' existing or proposed capital
structure (both debt and equity or other interests)
and shall be satisfied with the terms and provisions
thereof.
(19) Certified Copy of Organizational Documents. The LC
Agent shall have received from each of the Credit
Parties a copy, certified by a duly authorized
officer of such Person to be true and complete as of
the Closing Date, of each of its Organizational
Documents as in effect on such date.
(20) Corporate Action. All corporate action necessary for
the valid execution, delivery and performance by each
of the Credit Parties of this Agreement and the other
Credit Documents to which it is or is to become a
party, and the transactions contemplated therein
shall have been duly and effectively taken, and
evidence thereof satisfactory to the LC Agent shall
have been provided to the LC Agent.
(21) Incumbency Certificate. The LC Agent shall have
received from each of the Credit Parties an
incumbency certificate, dated as of the Closing Date,
certified by a duly authorized officer of such Credit
Party, and giving the name and bearing a specimen
signature of each individual who shall be authorized:
(A) to sign, in the name and on behalf of the each
such Credit Party each of the Credit Documents to
which such Person is or is to become a party, (B) in
the case of the Borrower Representative, to apply for
Letters of Credit, and (C) to give notices and to
take other action on its behalf under the Credit
Documents.
(22) Insurance. The LC Agent shall have received (A) a
certificate of insurance from an independent
insurance broker acceptable to the LC Agent, dated as
of the Closing Date, identifying insurers, types of
insurance, insurance limits, and policy terms, and
otherwise describing the insurance obtained in
accordance with the provisions of the Security
Agreements and (B) a detailed schedule describing all
insurance coverage maintained by or for any Credit
Party together with copies of the underlying
policies, each of (A) and (B) in form and substance
satisfactory to the LC Agent.
(23) Opinions of Counsel. Each of the LC Participants and
the LC Agent shall have received a favorable opinion
addressed to the LC Participants and the LC Agent,
dated as of the Closing Date, in form and substance
satisfactory to the LC Participants and the LC Agent,
from counsel to the Credit Parties.
(24) Security Interests in Personal and Mixed Property.
The Collateral Agent shall have received evidence
satisfactory to it that each Credit Party shall have
taken or caused to be taken all such actions,
executed and delivered
40
or caused to be executed and delivered all such
agreements, documents and instruments, and made or
caused to be made all such filings and recordings
(other than the filing or recording of items
described in clauses (C) and (D) below) that may be
necessary or, in the opinion of the Collateral Agent,
desirable in order to create in favor of the
Collateral Agent, for the benefit of the Secured
Parties a valid and (upon such filing and recording)
perfected first-priority Lien in the Collateral. Such
actions shall include, without limitation, the
following:
(A) Schedules to Credit Documents. Delivery to
Collateral Agent of accurate and complete
schedules to all of the applicable Credit
Documents.
(B) Instruments. Delivery to Collateral Agent
all promissory notes or other instruments
(duly endorsed, where appropriate, in a
manner satisfactory to the Collateral Agent)
evidencing any Collateral.
(C) UCC Termination Statements. Delivery to the
Collateral Agent of UCC termination
statements duly executed by all applicable
Persons for filing in all applicable
jurisdictions as may be necessary in the
determination of the Collateral Agent to
terminate any effective UCC financing
statements or fixture filings (other than
any such financing statements or fixture
filings in respect of Liens permitted to
remain outstanding pursuant to the terms of
this Agreement).
(D) UCC Financing Statements. Delivery to the
Collateral Agent of UCC financing statements
and, where appropriate, duly executed by
each applicable Credit Party with respect to
all personal and mixed property Collateral
of such Credit Party, for filing by the
Closing Date in all jurisdictions as may be
necessary or, in the opinion of the
Collateral Agent, desirable to perfect the
security interests created in such
Collateral pursuant to the Credit Documents.
(E) PTO Cover Sheets, Etc. Delivery to the
Collateral Agent of all cover sheets and
other documents or instruments required to
be filed with the PTO in order to create or
perfect Liens in respect of any IP
Collateral.
(F) Certificates of Title, Etc. If requested by
the Collateral Agent, delivery to the
Collateral Agent of certificates of title
with respect to all motor vehicles and the
taking of all actions necessary to cause the
Collateral Agent to be noted as lienholder
thereon or otherwise necessary to perfect
the first-priority Lien granted to
Collateral Agent on behalf of the Secured
Parties in such motor vehicles.
41
(G) Control Agreements. Delivery to the
Collateral Agent of such control agreements
with such financial institutions and other
Persons in order to perfect Liens in respect
of the Authorized Accounts, securities
accounts, if any, and other Collateral
pursuant to the Credit Documents.
(25) Security Interests in Real Property. The Collateral
Agent shall have received from all applicable Credit
Parties:
(A) Mortgages, Deeds of Trust, Etc. All
mortgages, deeds of trust and any other
Security Documents, including any fixture
filings, relating to the Collateral Agent's
first-priority Lien in real property
Collateral, duly executed and notarized by
each applicable Credit Party with respect to
such Collateral of such Credit Party, for
filing by the Closing Date in all
jurisdictions as may be necessary or, in the
opinion of the Collateral Agent, desirable
to perfect the security interests or liens
created in such Collateral pursuant to the
Credit Documents.
(B) Opinions of Local Counsel. Delivery to the
Collateral Agent of an opinion of counsel
(which counsel shall be satisfactory to the
Collateral Agent and the LC Agent) under the
laws of each jurisdiction in which any
Credit Party or any real property Collateral
is located with respect to the creation and
perfection of the security interests in
favor of the Collateral Agent in such
Collateral and such other matters governed
by the laws of such jurisdiction regarding
such security interests as the Collateral
Agent and/or the LC Agent may request, in
each case in form and substance satisfactory
to such Person.
(26) Outstanding Indebtedness. The Indebtedness of the
Borrowers and Guarantors existing on the Closing Date
set forth on the Disclosure Schedule shall be
satisfactory in all respects to the LC Agent.
(27) No Litigation. No litigation, investigation or
inquiry by any entity (private or governmental) shall
be pending or threatened with respect to this
Agreement, any of the transactions contemplated
hereby or any documentation executed in connection
herewith, or with respect to any material debt of the
Borrowers or the Guarantors which is to remain
outstanding after the Closing Date, or which the LC
Agent shall determine could cause a Material Adverse
Change.
(28) DIP LC Agreement. No Default or Event of Default (as
such terms are defined in the DIP LC Agreement) shall
have occurred or be continuing.
(29) Enron Settlement Agreement. The performance of all
actions required to consummate the Enron Settlement
Agreement (including the payment of
42
any amounts due the Enron Parties under the Enron
Settlement Agreement, the execution of any required
documents, and the delivery of any required
instruments or other documents) shall have occurred
to the satisfaction of the LC Agent.
(30) Appraisals for Eligible Assets. Delivery, on or
before the Closing Date, to the LC Agent of all final
appraisals conducted by an appraiser selected by the
LC Agent, in form and substance satisfactory to the
LC Agent, of the Eligible Fixed Assets.
(31) Environmental and Hazardous Waste Assessments.
Delivery to the LC Agent any and all non-confidential
environmental and hazardous waste site assessments,
reports or analyses that have been obtained on or
before the Closing Date (including, without
limitation, any drafts thereof to the extent not yet
completed), covering any real property presently or
formerly owned, operated or leased by the Credit
Parties and any other real property in respect of
which the Credit Parties may have material liability,
whether contingent or otherwise, relating to the
presence of Hazardous Substances or noncompliance
with Environmental Laws, together with such
information as the LC Agent may request with respect
to any such assessment, report or analyses ongoing as
of the Closing Date, to the extent requested by the
LC Agent.
(32) PBGC. All claims against any Credit Party with
respect to the alleged joint and several liability of
EOTT GP for underfunded benefits liabilities upon the
termination of the benefit pension plan known as the
"Enron Corp. Cash Balance Plan", shall have been
resolved to the satisfaction of the LC Agent.
(33) Big Warrior Settlement. An order of the Bankruptcy
Court shall have been entered approving the Big
Warrior Settlement, and such order shall be a Final
Order.
(34) Texas-New Mexico Pipeline Cases. Progress
satisfactory to the LC Agent shall have been made
with respect to litigation (A) over alleged
indemnification liability of EOTT Pipeline to the
Texas-New Mexico Pipeline Company ("TEX-NEW MEX CO.")
with respect to environmental claims against Tex-New
Mex Co., and (B) over any alleged liability of EOTT
Pipeline under any of Xxxx X. Roam, et al. vs.
Texas-New Mexico Pipe Line Company and EOTT Energy
Pipeline Limited Partnership, Cause Xx. XX00000,
Xxxxxxxx Xxxxx xx Xxxxxxx Xxxxxx, Xxxxx, 238th
Judicial District; Xxxxx X. Xxxxxx and Xxxxxxx X.
Xxxxxx vs. EOTT Energy Pipeline Limited Partnership
and Texas-New Mexico Pipe Line Company, Cause No.
CV438000, District Court of Midland County, Texas,
385th Judicial District; Xxxxxx X. Xxxxxx and Xxxxx
X. Xxxxxx vs. Texas-New Mexico Pipe Line Company,
Inc., EOTT Energy Pipeline Limited Partnership and
Amerada Xxxx Corporation, Case No. CIV 01-
43
1321 M/JHG, United States District Court for the
District of New Mexico; Xxxxxxx Xxxxxxxx and Xxxxx
Xxxxxxxx vs. Texas-New Mexico Pipe Line Company,
TXNMX and EOTT Energy Pipeline Limited Partnership,
Cause Xx. XX00000, Xxxxxx Xxxxx xx Xxx xx Xxxxxxx
Xxxxxx, Xxxxx; Xxxxxxx X. Xxxxxx and Xxxxx X. Xxxxxx
vs. EOTT Energy Pipeline Limited Partnership and EOTT
Energy Corp., Case No. CIV-02-370 L, United States
District Court for the Western District of Oklahoma;
Xxxxxx X. Xxxxxx and Xxxxx X. Xxxxxx vs. Texas-New
Mexico Pipe Line Company, Inc., EOTT Energy Pipeline
Limited Partnership, and EOTT Energy Corp., Case No.
D-0101-CV-2002-02122, 1st Judicial District Court,
Santa Fe County, New Mexico.
(ii) Extensions of Credit. In addition to the foregoing,
the LC Issuer shall have no obligation to make any Extension of Credit
(including the initial Extension of Credit on the Closing Date) unless
the following conditions precedent have been satisfied:
(1) Representations True; No Event of Default. Each of
the representations and warranties of any of the
Credit Parties contained in this Agreement, the other
Credit Documents or in any document or instrument
delivered pursuant to or in connection with this
Agreement shall be true as of the time which they
were made and shall also be true at and as of the
time of the making of such Extension of Credit, with
the same effect as if made at and as of that time
(except to the extent that such representations and
warranties relate expressly to an earlier date), no
Default or Event of Default shall have occurred and
be continuing or would result from the making of such
Extension of Credit, and no Ten-Day Waiting Period
shall be continuing.
(2) Letter of Credit Request. All LC Conditions described
in Section 2(a), and all other requirements of
Section 2(b), shall be satisfied.
(3) No Material Adverse Change. No Material Adverse
Change shall have occurred.
(4) No Legal Impediment. No change shall have occurred in
any Law or regulations thereunder or interpretations
thereof that, in the opinion of any LC Participant,
would make it illegal for such LC Participant to
participate in the issuance, extension or renewal of
such Letter of Credit, or in the opinion of the LC
Issuer would make it illegal for such LC Issuer to
issue, extend of renew such Letter of Credit.
(5) Governmental Regulation. Each LC Participant shall
have received such statements in form and substance
satisfactory to such LC Participant as such LC
Participant shall require for the purpose of
compliance with any applicable regulations of the
Comptroller of the Currency or the Board of Governors
of the Federal Reserve System.
44
(6) Proceedings and Documents. All proceedings in
connection with the transactions contemplated by this
Agreement, the other Credit Documents and all other
documents incident thereto shall be satisfactory in
form and substance to the LC Participants, the LC
Agent and the LC Agent's Special Counsel, and the LC
Participants, the LC Agent and such counsel shall
have received all information and such counterpart
originals or certified or other copies of such
documents as the LC Agent shall reasonably request.
(7) Payment of Fees. The Borrowers shall have paid to the
LC Agent all fees, expenses and other amounts due and
owing, on the date of the issuance, extension or
renewal of any Letter of Credit.
Each request by the Borrower Representative for, and the
acceptance by the Borrowers of, an Extension of Credit shall be deemed
to be a representation and warranty by the Borrowers that the
conditions specified in (1)-(7) above have been and remain satisfied as
of the date of such representation and warranty and the date of such
Extension of Credit.
(g) Use of Proceeds
(i) Borrowers shall use all Letters of Credit solely for
the purposes specified in Section 2(a)(ii)(4).
(ii) In no event shall any Letter of Credit be used
directly or indirectly by any Person for personal, family, household or
agricultural purposes, (A) for the purpose, whether immediate,
incidental or ultimate, of purchasing, acquiring or carrying any
"margin stock" (as such term is defined in Regulation U promulgated by
the Board of Governors of the Federal Reserve System) or (B) to extend
credit to others directly or indirectly for the purpose of purchasing
or carrying any such margin stock. The Borrowers represent and warrant
that no Borrower is engaged principally in, or has as one of any
Borrower's important activities, the business of extending credit to
others for the purpose of purchasing or carrying such margin stock.
(h) Mandatory Prepayments
(i) The Borrowers shall ensure that at no time will the
aggregate LC Obligations exceed the Borrowing Base as calculated as of
any day during the Commitment Period, which amount as so calculated may
differ from the amount of the Borrowing Base reflected in the most
recently delivered Borrowing Base Report. If at any time aggregate LC
Obligations exceed the lesser of (A) the Borrowing Base at such time
(whether due to a reduction in the Borrowing Base in accordance with
this Agreement, or otherwise), or (B) the Maximum Commitment at such
time, the Borrowers shall pay to the Collateral Agent, an amount at
least equal to such excess to be applied in accordance with the Cash
Waterfall.
(ii) If at any time any Credit Party or any Subsidiary of
any Credit Party shall receive or be entitled to receive any proceeds
with respect to any sale or issuance by such
45
Person of (A) any Indebtedness not permitted by Section 7(a) or (B) any
additional equity (other than as described in clause (b) of the
definition of Permitted Capital Expenditures), the Borrowers shall pay
to the Collateral Agent, an amount equal to such proceeds to be applied
in accordance with the Cash Waterfall.
(iii) Any amounts prepaid pursuant to this Section shall be
in addition to, and not in lieu of, all payments otherwise required to
be paid under the Credit Documents at the time of such prepayment.
(i) Application of Payments made to LC Agent. Subject to
the provisions of the Intercreditor Agreement, funds received by the LC Agent in
accordance with the Cash Waterfall shall be applied as follows:
(1) first, to pay expenses incurred by the LC Agent;
(2) second, to pay fees and other amounts (other than
principal) then due and payable under this Agreement;
(3) third, to the LC Issuer to pay Matured LC
Obligations; and
(4) fourth, to cash collateralize any Letters of Credit
in an amount up to 105% of the Maximum Drawing
Amount.
If any LC Participant owes payments to LC Issuer for the purchase of a
participation under Section 2(c) or to the LC Agent hereunder, any
amounts otherwise distributable under this Section to such LC
Participant shall be deemed to belong to LC Issuer or the LC Agent,
respectively, to the extent of such unpaid payments, and the LC Agent
shall apply such amounts to make such unpaid payments rather than
distribute such amounts to such LC Participant.
(j) Voluntary Reduction of Maximum Commitment Amount;
Interest Rates and Fees
(i) The Borrowers shall have the right from time to time
to reduce permanently the Maximum Commitment; provided, however, that
(A) notice of such reduction is given not less than ten (10) Business
Days prior to such reduction, (B) the resulting Maximum Commitment is
not less than the aggregate LC Obligations at the time of such
reduction and (C) each partial reduction shall be in an amount at least
equal to $5,000,000 and in multiples of $1,000,000 in excess thereof.
(ii) Upon the occurrence and during the continuance of a
Default or Event of Default, all Obligations shall bear interest on
each day outstanding at the Default Rate.
(iii) Commitment Fee. In consideration of each LC
Participant's commitment to participate in the LC Issuer's obligations
and rights under each Letter of Credit issued hereunder and the amount
of each Matured LC Obligation paid by LC Issuer thereunder, the
Borrowers jointly and severally agree to pay to the LC Agent, for the
pro rata account of each LC Participant in accordance with its
respective Percentage Share a commitment
46
fee determined on a daily basis equal to the Commitment Fee Rate in
effect on such day multiplied by the unused portion of such LC
Participant's Percentage Share of the unused portion of the Maximum
Commitment on each day during the Commitment Period, determined for
each such day by deducting from the amount of the Maximum Commitment at
the end of such day the aggregate LC Obligations. This commitment fee
shall be due and payable in arrears on each Monthly Payment Date and at
the end of the Commitment Period.
(iv) Letter of Credit Fee. In consideration of LC Issuer's
issuance of any Letter of Credit, the Borrowers jointly and severally
agree to pay to the LC Agent, for the pro rata account of each LC
Participant in accordance with its respective Percentage Share, the
Letter of Credit Fee, payable monthly in arrears on each Monthly
Payment Date that any Letter of Credit is outstanding, and on the
Monthly Payment Date immediately following the expiration date of each
Letter of Credit for the immediately preceding month or portion
thereof. If the LC Agent, in contravention of the terms of this
Agreement, receives any amount in excess of the Letter of Credit Fee
required to be paid by the Borrowers, the LC Agent shall promptly
deposit such excess amount into the Collection Account (as defined in
the Intercreditor Agreement). If, however, the LC Agent receives an
amount less than the Letter of Credit Fee required to be paid by the
Borrowers (the "DEFICIENCY"), the Borrowers shall promptly pay the
Deficiency to the LC Agent for the account of all LC Participants in
accordance with their respective Percentage Shares.
(v) Letter of Credit Fronting Fee. In consideration of LC
Issuer's issuance of any Letter of Credit, the Borrowers jointly and
severally agree to pay to the LC Issuer for its own account, (A) upon
issuance, a letter of credit fronting fee equal to the greater of (1)
an amount equal to 0.25% per annum times the face amount of such Letter
of Credit and (2) $250, and (B) a minimum administrative issuance fee
and such other fees and charges customarily charged by LC Issuer in
respect of any issuance, amendment or negotiation of any Letter of
Credit in accordance with LC Issuer's published schedule of such
charges effective as of the date of such amendment or negotiation.
(vi) Arrangement Fee. In addition to all other amounts due
to the LC Agent under the Credit Documents, the Borrowers jointly and
severally agree to pay to the LC Agent, for its own account, an
arrangement fee, payable monthly in arrears on each Monthly Payment
Date with respect to the immediately preceding month (or portion
thereof) in an amount equal to (1) one percent (1%) per annum
multiplied by (2) the Average Daily Maximum Commitment Amount for such
month (or portion thereof). For purposes of this Section 2(j), the
"AVERAGE DAILY MAXIMUM COMMITMENT AMOUNT" for any month (or portion
thereof) shall equal the quotient of (A) the sum of the Maximum
Commitment as it exists at 5:00 p.m. New York time, for each day in
such month divided by (B) the total number of days in such month. (or
portion thereof).
(vii) Facility Fee. The Borrowers jointly and severally
agree to pay to the LC Agent a facility fee in the amount of $1,250,000
(the "FACILITY FEE") which fee shall be fully earned by the LC Agent as
of the Closing Date and shall be paid on the Closing Date for the
account of the LC Agent.
47
(viii) Change in Control Fee. The Borrowers jointly and
severally agree to pay to the LC Agent a Change in Control Fee in the
amount of $250,000, for its own account, upon (1) a Change in Control
or (2) the disposal by the holders of the Old Senior Notes of 50% of
the equity interests such holders own, as of the Closing Date, in the
membership interests of EOTT LLC.
(ix) Reduction Fee. The Borrowers jointly and severally
agree to pay to the LC Agent a reduction fee in the amount of
$2,500,000 (the "REDUCTION FEE") for its own account on the date that
is the earlier of (1) twelve (12) months from the Closing Date and (2)
March 29, 2004, in the event that the sum of (A) the Maximum
Commitment, (B) the "Maximum Commitment" (as defined in the Crude Oil
Purchase Agreement) and (C) the "Maximum Commitment" (as defined in the
Receivables Purchase Agreement) shall not have been permanently reduced
to an amount equal to or less than $200,000,000 on or prior to such
date.
3. PAYMENTS TO LC PARTICIPANTS.
(a) General Procedures. The Credit Parties will make each
payment that they owe under the Credit Documents (other than fees payable to the
Lender Parties on the Closing Date) to the Collateral Agent for the account of
the Lender Party to whom such payment is owed in lawful money of the United
States of America, without set-off, deduction or counterclaim and in immediately
available funds. Each such payment must be received by the Collateral Agent not
later than noon, New York, New York time, on the date such payment becomes due
and payable. Any payment received by the Collateral Agent after such time will
be deemed to have been made on the next following Business Day. Should any such
payment become due and payable on a day other than a Business Day, the maturity
of such payment shall be extended to the next succeeding Business Day, and, in
the case of a payment of principal, past due interest, fees or expenses,
interest shall accrue and be payable thereon for the period of such extension in
the Credit Document under which such payment is due. Each payment under a Credit
Document shall be due and payable at the place provided therein. The Collateral
Agent shall distribute all money so collected or received in accordance with the
Cash Waterfall.
(b) Payment Obligations Absolute. Notwithstanding any
payment by the Credit Parties to the Collateral Agent pursuant to Section 3(a),
nothing contained in this Agreement is intended to or shall (i) impair, as among
the Credit Parties and the Lender Parties, the obligation of the Credit Parties,
which is absolute and unconditional, to pay to the Lender Parties any
Obligations payable by the Credit Parties under or this Agreement or any other
Credit Document as and when the same shall become due and payable in accordance
with their respective terms, or (ii) prevent the Lender Parties from exercising
all remedies otherwise permitted by applicable law upon default under this
Agreement or any other Credit Document, subject to the Intercreditor Agreement.
(c) Capital Reimbursement. If any Lender Party shall
determine that the adoption, effectiveness, phase-in or applicability after the
date hereof of any Law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof, or compliance by a Lender Party with any guideline,
request or directive regarding capital adequacy (whether or not having the force
of Law) of any
48
such Tribunal, has or would have the effect of reducing the rate or return on
the capital of such Lender Party or any Person controlling such Lender Party as
a consequence of, or with reference to such Lender Party's Letters of Credit or
participations therein or other obligations hereunder to a level below which
such Lender Party or such controlling Person could have achieved but for such
adoption, effectiveness, phase-in, applicability, change or compliance (taking
into consideration the policies of such Lender Party or such controlling Person
with regard to such capital adequacy), then from time to time within five
Business Days after notice to the Borrower Representative from such Lender Party
of a written statement (with a copy to the LC Agent) setting forth in reasonable
detail the basis of the calculation of such compensation and reimbursement,
which statement shall be conclusive and binding upon all parties hereto absent
manifest error and which shall be delivered to the Borrower Representative as
soon as practicable after such Lender Party becomes aware of the fact giving
rise thereto, the Borrowers shall pay to such Lender Party such additional
amount or amounts as will compensate such Lender Party or such controlling
Person on an after-tax basis for such reduction.
(d) Increased Cost of Letters of Credit. If any
applicable Law (whether now in effect or hereinafter enacted or promulgated,
including Regulation D) or any interpretation or administration thereof by any
governmental authority charged with the interpretation or administration thereof
(whether or not having the force of Law):
(i) shall change the basis of taxation of payments to any
Lender Party of any principal, interest or other amounts attributable
to any Letter of Credit or otherwise due under this Agreement in
respect of any Letter of Credit (other than taxes imposed on, or
measured by, the overall net income of such Lender Party or any
Applicable Lending Office of such Lender Party by any jurisdiction in
which such Lender Party or any such Applicable Lending Office is
located); or
(ii) shall change, impose, modify, apply or deem
applicable any reserve, special deposit or similar requirements in
respect of any Letter of Credit or against assets of, deposits with or
for the account of, or credit extended by, such Lender Party; or
(iii) shall impose on any Lender Party any other condition
affecting any Letter of Credit, the result of which is to increase the
cost to any Lender Party of issuing any Letter of Credit or to reduce
the amount of any sum receivable by any Lender Party in respect of any
Letter of Credit by an amount deemed by any Lender Party to be
material,
then such Lender Party shall promptly notify the LC Agent and the Borrower
Representative in writing of the happening of such event and of the amount
required to compensate such Lender Party for such event (on an after-tax basis,
taking into account any taxes on such compensation), whereupon Borrower shall,
within five Business Days after demand therefor by such Lender Party, pay such
amount to the LC Agent for the account of such Lender Party.
(e) Notice; Change of Applicable Lending Office. A Lender
Party shall notify the Borrower Representative of any event occurring after the
date of this Agreement that will entitle such Lender Party to compensation under
Sections 3(a), (c), or (d) as promptly as practicable, but in any event within
90 days after such Lender Party obtains actual knowledge thereof; provided,
however, that (i) if such Lender Party fails to give such notice within 90 days
49
after it obtains actual knowledge of such an event, such Lender shall, with
respect to compensation payable pursuant to Sections 3(a), (c), or (d) in
respect of any costs or compensation resulting from such event, only be entitled
to payment under Sections 3(a), (c), or (d) for costs or compensation incurred
from and after the date 90 days prior to the date that such Lender Party does
give such notice and (ii) such Lender Party will designate a different
Applicable Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the sole determination of such
Lender Party, be disadvantageous to such Lender Party, except that such Lender
Party shall have no obligation to designate an Applicable Lending Office located
outside the United States of America. Each Lender Party will furnish to the
Borrower Representative a certificate setting forth the basis and amount of each
request by such Lender Party for compensation under Sections 3(a), (c), or (d).
(f) Availability. If any change in applicable Laws, or in
the interpretation or administration thereof, of or in any jurisdiction
whatsoever, domestic or foreign, shall make it unlawful or impracticable for
such Lender Party to issue or participate in Letters of Credit, then, upon
notice by such Lender Party to the Borrower Representative and such Lender
Party, Borrowers' right to obtain Letters of Credit shall be suspended to the
extent and for the duration of such illegality, impracticability or restriction.
The Borrowers agree to indemnify each Lender Party and hold it harmless against
all costs, expenses, claims, penalties, liabilities and damages that may result
from any such change in Law, interpretation or administration. Such
indemnification shall be on an after-tax basis, taking into account any taxes
imposed on the amounts paid as indemnity.
(g) Reimbursable Taxes. Borrowers covenant and agree
that:
(i) Borrowers will indemnify each Lender Party against
and reimburse each Lender Party for all present and future stamp and
other taxes, levies, costs and charges whatsoever imposed, assessed,
levied or collected on or in respect of this Agreement or any Letters
of Credit (whether or not legally or correctly imposed, assessed,
levied or collected), excluding, however, any taxes imposed on or
measured by the overall net income of such Lender Party or any
Applicable Lending Office of such Lender Party by any jurisdiction in
which such Lender Party or any such Applicable Lending Office is
located (all such non-excluded taxes, levies, costs and charges being
collectively called "REIMBURSABLE TAXES" in this Section). Such
indemnification shall be on an after-tax basis, taking into account any
taxes imposed on the amounts paid as indemnity.
(ii) All payments on account of the principal of, and
interest on, each Lender Party's Letters of Credit, and all other
amounts payable by Borrowers to any Lender Party hereunder, shall be
made in full without set-off or counterclaim and shall be made free and
clear of and without deductions or withholdings of any nature by reason
of any Reimbursable Taxes, all of which will be for the account of
Borrowers. In the event of Borrowers being compelled by Law to make any
such deduction or withholding from any payment to any Lender Party,
Borrowers shall pay on the due date of such payment, by way of
additional interest, such additional amounts as are needed to cause the
amount receivable by such Lender Party after such deduction or
withholding to equal the amount which would have been receivable in the
absence of such deduction or withholding. If Borrowers shall make any
deduction or withholding as aforesaid, Borrowers shall within
50
60 days thereafter forward to such Lender Party an official receipt or
other official document evidencing payment of such deduction or
withholding.
(iii) Notwithstanding the foregoing provisions of this
Section, Borrowers shall be entitled, to the extent it is required to
do so by Law, to deduct or withhold (and not to make any
indemnification or reimbursement for) income or other similar taxes
imposed by the United States of America (other than any portion thereof
attributable to a change in federal income tax Laws effected after the
date hereof) from interest, fees or other amounts payable hereunder for
the account of any Lender Party, other than Lender Party (A) who is a
U.S. person for Federal income tax purposes or (B) who has the
Prescribed Forms on file with the LC Agent (with copies provided to the
Borrower Representative) for the applicable year to the extent
deduction or withholding of such taxes is not required as a result of
the filing of such Prescribed Forms; provided, however, that if
Borrower shall so deduct or withhold any such taxes, it shall provide a
statement to the LC Agent and such Lender Party, setting forth the
amount of such taxes so deducted or withheld, the applicable rate and
any other information or documentation which such Lender Party may
request for assisting such Lender Party to obtain any allowable credits
or deductions for the taxes so deducted or withheld in the jurisdiction
or jurisdictions in which such Lender Party is subject to tax. As used
in this Section, "PRESCRIBED FORMS" means such duly executed forms or
statements, and in such number of copies, which may, from time to time,
be prescribed by Law and which, pursuant to applicable provisions of
(i) an income tax treaty between the United States and the country of
residence of such Lender Party providing the forms or statements, (ii)
the Tax Code or (iii) any applicable rules or regulations thereunder,
permit Borrowers to make payments hereunder for the account of such
Lender Party free of such deduction or withholding of income or similar
taxes.
4. OTHER ACTIONS OF CREDIT PARTIES.
(a) Each Credit Party shall at any time and from time to time take such
steps as the LC Agent may request for the Collateral Agent to (i)
obtain an acknowledgment, in form and substance satisfactory to the
Collateral Agent, of any bailee having possession of any of the
Collateral that the bailee holds such Collateral for the Collateral
Agent, (ii) obtain "control" of any investment property, deposit
accounts, letter-of-credit rights or electronic chattel paper (as such
terms are defined in Article 9 of the UCC with corresponding provisions
in Sections 9-104, 9-105, 9-106 and 9-107, relating to what constitutes
"control" for such items of Collateral), with any agreements
establishing control to be in form and substance satisfactory to the
Collateral Agent, and (iii) otherwise insure the continued perfection
and priority of the Collateral Agent's security interest in any of the
Collateral and of the preservation of its rights therein.
(b) Each Credit Party shall at any time and from time to time take such
steps as the Collateral Agent may request with respect to the creation
and perfection of valid, enforceable, first priority mortgage Liens on
and/or security interests in any real property or fixtures included in
the Collateral owned or leased by such Credit Party, including, without
limitation, (i) the execution, delivery, acknowledgement, filing and
recordation of such mortgages, deeds of trust, fixture filings and
similar instruments as the Collateral Agent
51
deems necessary or desirable to the granting of a valid, enforceable
first priority mortgage Lien on any such property or fixtures and (ii)
the delivery of such mortgagee's title insurance (other than with
respect to the real property underlying pipelines, to the extent not
typically obtained by lenders taking a lien in similar assets), title
opinions and other legal opinions as the Collateral Agent deems
necessary or desirable to better confirm the granting to the Collateral
Agent by the applicable Credit Party of such Lien on such Credit
Party's real property or fixtures included in the Collateral owned or
leased by such Credit Party.
(c) Nothing contained in this Agreement shall be construed to narrow the
scope of the Collateral Agent's security interests in or liens on any
of the Collateral or the perfection or priority thereof or to impair or
otherwise limit any of the rights, powers, privileges or remedies of
the Collateral Agent.
5. REPRESENTATIONS AND WARRANTIES. Each Credit Party hereby makes the
following representations and warranties, each of which is a continuing
representation and warranty, the continuing truth and accuracy of each of such
representations and warranties being a continuing condition of financing of
Borrowers by the LC Issuer:
(a) Such Credit Party is duly organized, formed or incorporated and validly
existing under the Laws of its jurisdiction of organization or
incorporation, having all powers required to carry on its business.
Such Credit Party has the partnership, corporate or limited liability
company, as applicable, power to execute, deliver and perform the terms
and provisions of this Agreement and the other Credit Documents. Such
Credit Party has taken or caused to be taken all necessary partnership,
corporate or limited liability company, as applicable, action to
authorize the execution, delivery and performance of this Agreement and
the other Credit Documents. Each Borrower is duly authorized to borrow
funds hereunder.
(b) Such Credit Party is duly qualified, in good standing and authorized to
do business in the jurisdictions in the United States identified in
Section 5(b) of the Disclosure Schedule. Such jurisdictions comprise
all jurisdictions within the United States wherein the character of the
properties owned or held by it or the nature of business transacted by
it makes such qualification necessary, except to the extent that such
non-qualification, lack of good standing or non-authorization could not
result in a Material Adverse Change. Such Credit Party has taken all
actions and procedures customarily taken in order to enter, for the
purpose of conducting business or owning property, each jurisdiction
outside the United States wherein the character of the properties owned
or held by it or the nature of the business transacted by it makes such
actions and procedures necessary, except for such actions which if not
taken, could not result in a Material Adverse Change.
(c) This Agreement and the other Credit Documents constitute and will
constitute legal, valid and binding obligations of such Credit Party,
enforceable against it in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally.
52
(d) Except as set forth in Section 5(d) of the Disclosure Schedule, such
Credit Party is in compliance with the requirements of all applicable
laws, rules, regulations and orders of any governmental authority or
Tribunal relating to its business as presently conducted or
contemplated and relating to all real estate formerly or presently
owned, operated or leased by any Credit Party, including, without
limitation, all permits, licensing and approval requirements; ERISA;
the Tax Code; all limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables
contained in any Environmental Law, or in any regulation, code, plan,
order, decree, judgment, injunction, notice or demand letter issued,
entered, promulgated or approved thereunder, except to the extent that
any such non-compliance (alone or in the aggregate with other such
instances of non-compliance) could not result in a Material Adverse
Change.
(e) No action of, or filing with, any governmental or public body or
authority (other than, as of the Closing Date, the filing or recording
of such UCC financing statements, mortgages, deeds of trust, fixture
filings and other documents evidencing security interests and Liens in
favor of the Collateral Agent as have been delivered, in form and
substance satisfactory, to the LC Agent on or prior to the Closing
Date) is required in connection with the execution, delivery and
performance of this Agreement, the other Credit Documents or any of the
instruments or documents to be delivered pursuant hereto or thereto.
(f) The execution and delivery by such Credit Party of the Credit Documents
to which it is a party, the performance by such Credit Party of its
obligations under such Credit Documents and the consummation of the
transactions contemplated by the various Credit Documents do not and
will not (i) except as set forth in Section 5(f) of the Disclosure
Schedule, conflict with any provision of (1) any Law, or (2) the
Organizational Documents of such Credit Party, (ii) conflict with the
terms of or result in a breach or default under any material contract,
indenture, lease, license or other agreement to which such Credit Party
is party or (iii) result in or require the creation of any Lien upon
any assets or properties of such Credit Party or any of its Affiliates,
except as expressly contemplated in the Credit Documents. Except as
expressly contemplated in the Credit Documents, no permit, consent,
approval, authorization or order of and no notice to or filing,
registration or qualification with, any Tribunal or third party is
required in connection with the execution, delivery or performance by
such Credit Party of any Credit Document or to consummate any
transactions contemplated by the Credit Documents, other than consents,
approvals, authorizations or orders that have been obtained or notices
given or filings made prior to the date hereof.
(g) Such Credit Party's place of incorporation, organization or formation,
as applicable, is the State of Delaware, and its principal place of
business and chief executive office, where its records are maintained
are disclosed on the signature page hereto. Except as set forth in
Section 5(g) of the Disclosure Schedule, such Credit Party does not use
any trade styles, trade names or fictitious partnership names.
(h) All filings, assignments, pledges and deposits of documents or
instruments will have been made and all other actions have been taken
that are necessary or advisable (other than, as of the Closing Date,
the filing or recording of such UCC financing statements, mortgages,
53
deeds of trust, fixture filings and other documents evidencing security
interests and Liens in favor of the Collateral Agent as have been
delivered, in form and substance satisfactory, to the LC Agent on or
prior to the Closing Date) under applicable law, to establish and
perfect the Collateral Agent's first-priority security interest in and
Liens on the Collateral. The Collateral and the Collateral Agent's
rights with respect to the Collateral are not subject to any set-off,
claims, recoupment, withholdings or other defenses. The Credit Parties
are the owners of the Collateral, free from any lien, security
interest, encumbrance or any other claim of demand except for Permitted
Liens.
(i) After giving effect to the transactions contemplated by this Agreement
and the other Credit Documents, there does not exist at the date hereof
any condition or event which constitutes a Default hereunder or which
after notice or lapse of time, or both, would constitute such a Default
hereunder.
(j) Except as set forth in Section 5(j) of the Disclosure Schedule, (a) no
Termination Event has occurred with respect to any ERISA Plan and all
ERISA Affiliates are in compliance with ERISA in all material respects,
(b) no ERISA Affiliate is required to contribute to, or has any other
absolute or contingent Liability in respect of, any "multiemployer
plan" as defined in Section 4001 of ERISA, and (c) no "accumulated
funding deficiency" (as defined in Section 412(a) of the Tax Code)
exists with respect to any ERISA Plan, whether or not waived by the
Secretary of the Treasury or his delegate and (d) the current value of
each ERISA Plan's benefits does not exceed the current value of such
ERISA Plan's assets available for the payment of such benefits.
(k) Except as set forth in Section 5(k) of the Disclosure Schedule:
(i) No notice, notification, demand, request for
information, citation, summons, order, notice of violation, or notice
of noncompliance, has been issued, no complaint, consent order or
consent decree has been filed, no fine or penalty has been assessed and
no investigation or review is pending or threatened by any Tribunal or
any other Person with respect to any of the following: (A) any alleged
generation, treatment, storage, recycling, transportation, disposal or
Release of any Hazardous Materials, either by any Credit Party or on
any property owned by such Credit Party, (B) any remedial action that
might be needed to respond to any such alleged generation, treatment,
storage, recycling, transportation, disposal or Release, (C) any
alleged failure by any Credit Party to have any permit, license or
authorization required in connection with the conduct of its business
or with respect to any such generation, treatment, storage, recycling,
transportation, disposal or Release, or (D) the failure of any Credit
Party to comply in any manner and to any extent with any Environmental
Law.
(ii) No Credit Party has any known material contingent
Liability in connection with any alleged generation, treatment,
storage, recycling, transportation, disposal or Release of any
Hazardous Materials at any location.
(iii) No Credit Party has handled any Hazardous Materials,
other than as a generator, on any properties now or previously owned,
operated or leased by any Credit Party.
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(iv) Each Credit Party represents and warrants that:
(1) no PCBs are or have been present at any properties
now or previously owned, operated or leased by any
Credit Party;
(2) no asbestos is or has been present at any properties
now or previously owned, operated or leased by any
Credit Party;
(3) there are no underground storage tanks for Hazardous
Materials, active or abandoned, at any properties now
or previously owned, operated or leased by any Credit
Party; and
(4) no Hazardous Materials have been Released at, on or
under or are migrating from or to any properties now
or previously owned, operated or leased by any Credit
Party.
(v) No Credit Party has transported or arranged for the
transportation of any Hazardous Material to any location listed on the
National Priorities List under CERCLA, any location listed for possible
inclusion on the National Priorities List by the Environmental
Protection Agency in CERCLIS, nor, any location listed on any similar
state list or which is the subject of federal, state or local
enforcement actions or other investigations, other than as could not,
alone or in the aggregate, result in a Material Adverse Change.
(vi) Any Hazardous Substances that have been generated by
any Credit Party business or at any properties presently or formerly
owned, operated or leased by any Credit Party have, if required
pursuant to applicable Environmental Laws, been transported offsite
only by carriers having an identification number issued by the EPA (or
the equivalent thereof in any foreign jurisdiction), and treated or
disposed of only by treatment or disposal facilities maintaining valid
permits as required under applicable Environmental Laws, which
transporters and facilities have been and are, to the best of the
Credit Parties' knowledge, operating in compliance with such permits
and applicable Environmental Laws, other than as could not, alone or in
the aggregate, result in a Material Adverse Change.
(vii) No property now or previously owned, operated or
leased by any Credit Party is listed or proposed for listing on the
National Priorities List promulgated pursuant to CERCLA, in CERCLIS,
nor on any similar state list of sites requiring investigation or
clean-up, other than as could not, alone or in the aggregate, result in
a Material Adverse Change.
(viii) There are no Liens arising under or pursuant to any
Environmental Laws on any of the real properties or properties owned or
leased by any Credit Party, and no governmental actions of which any
Credit Party is aware have been taken or are in process that could
subject any of such properties to such Liens; nor would any Credit
Party be required to place any notice or restriction relating to the
presence of Hazardous Materials at any properties owned by it or in any
deed to such properties, other than as could not, alone or in the
aggregate, result in a Material Adverse Change.
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(ix) All environmental investigations, studies, audits,
tests, reviews or other analyses for ground water or soil contamination
relating to the Release of Hazardous Materials conducted by or which
are in the possession or control of such Credit Party in relation to
any properties or facility now or previously owned or leased by such
Credit Party are available for inspection by the LC Agent or the
Collateral Agent at the Borrower Representative's offices or
facilities.
(x) None of the Credit Parties or any real property is
subject to any applicable Environmental Law requiring the performance
of Hazardous Substances site assessments, or the removal or remediation
of Hazardous Substances, or the giving of notice to any Tribunal or
governmental authority or the recording or delivery to other Persons of
an environmental disclosure document or statement by virtue of or as a
condition to the transactions set forth herein and contemplated hereby.
(l) No Credit Party is subject to regulation under the Public Utility
Holding Company Act of 1935, the Investment Company Act of 1940 (as any
of the preceding acts have been amended) or any other law which
regulates the incurring by such Credit Party of indebtedness, including
laws relating to common contract carriers or the sale of electricity,
gas, steam, water or other public utility services. Such Credit Party
is not subject to regulation under the Federal Power Act that would
violate, result in a default under or prohibit the effectiveness or the
performance of any of the provisions of the Credit Documents.
(m) This Agreement is a "Credit Facility" for purposes of the Senior Notes
Indenture, as defined therein. Neither the execution of any Credit
Document executed in connection therewith, nor the issuance of Letters
of Credit hereunder or the consummation of any other transaction
contemplated by any of the foregoing is prohibited by, or conflicts
with the terms of the Senior Notes Indenture; and furthermore, none of
the execution, issuance, extension or consummation requires EOTT LLC to
make any provision for the granting of any Lien in favor of the holders
of the notes issued under the New Senior Notes.
(n) None of the following securities is evidenced by a certificate: (i) the
limited partner interest of EOTT LLC in EOTT OLP; (ii) the membership
interest of EOTT LLC in EOTT GP; (iii) the limited partner interest of
EOTT OLP in any of EOTT Canada, EOTT Liquids or EOTT Pipeline; or (iv)
the general partner interest of EOTT GP in any of EOTT OLP, EOTT
Canada, EOTT Liquids or EOTT Pipelines.
(o) No Credit Party is in default in the performance of any of the
covenants and agreements contained in any Credit Document. No event has
occurred and is continuing that constitutes a Default.
(p) The Initial Financial Statements, taken as a whole, fairly present EOTT
MLP's Consolidated financial position at the date thereof, the
Consolidated results of EOTT MLP's operations for the periods thereof
and Consolidated cash flows for the periods thereof. The Initial
Financial Statements were prepared in accordance with GAAP.
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(q) Other than as set forth in Section 5(q) of the Disclosure Schedule, no
Credit Party has any outstanding Liabilities of any kind (including
contingent obligations, tax assessments and unusual forward or
long-term commitments) which are, in the aggregate, material to such
Credit Party or material with respect to EOTT LLC's Consolidated
financial condition.
(r) Other than as set forth in Section 5(r) of the Disclosure Schedule, no
Credit Party is subject to or restricted by any franchise, contract,
deed, Organizational Document, restriction or other instrument or
restriction that could cause a Material Adverse Change.
(s) No certificate, statement or other information delivered herewith or
heretofore by any Credit Party to the LC Agent or to any LC Participant
in connection with this Agreement or any other Credit Document or in
connection with any transaction contemplated herein or therein contains
any untrue statement of a material fact or omits to state any material
fact necessary to make the statements contained herein or therein, in
light of the circumstances under which they were made, not misleading
as of the date made or deemed made. All written information furnished
after the date hereof by or on behalf of any Credit Party to the LC
Agent or to any LC Participant in connection with this Agreement or any
other Credit Document, or the transactions contemplated hereby or
thereby will be true, complete and accurate in every material respect
in light of the circumstances in which made, or based on reasonable
estimates on the date as of which such information is stated or
certified. There is no fact known to any Credit Party that has not been
disclosed to the LC Agent that could cause a Material Adverse Change.
(t) Other than as set forth in Section 5(t) of the Disclosure Schedule, (i)
there are no actions, suits or legal, equitable, arbitrative or
administrative proceedings pending or, to the knowledge of any Credit
Party threatened, against any Credit Party or affecting any Collateral
(including, without limitation, any that challenge or otherwise pertain
to any Credit Party's title to any Collateral) before any Tribunal and
(ii) there are no outstanding judgments, injunctions, writs, rulings or
orders by any such Tribunal against any Credit Party or any Credit
Party's stockholders, partners, directors or officers or affecting any
Collateral, that in either case could result in a Material Adverse
Change.
(u) Since December 31, 2002, neither the business nor the properties of any
Credit Party has been affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance).
(v) Neither EOTT LLC nor any Credit Party presently has any Subsidiary or
owns any capital stock in any other corporation or association except
those listed in Section 5(v) of the Disclosure Schedule. No Credit
Party is a member or partner of any general or limited partnership,
limited liability company, joint venture or association of any type
whatsoever except those listed in Section 5(v) of the Disclosure
Schedule. Each of the Credit Parties owns, directly or indirectly, the
entire equity interest in each of its Subsidiaries listed in Section
5(v) of the Disclosure Schedule.
(w) (i) EOTT LLC and its Subsidiaries on a Consolidated basis is solvent
(as such term is used in applicable bankruptcy, liquidation,
receivership, insolvency or similar Laws), and
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the absolute and contingent Liabilities of EOTT LLC and its
Subsidiaries on a Consolidated basis, including the Obligations, will
not exceed the fair market value of the assets of EOTT LLC and its
Subsidiaries on a Consolidated basis and (ii) the capital of EOTT LLC
and its Subsidiaries on a Consolidated basis is adequate for the
businesses in which the Credit Parties are engaged and intend to be
engaged. No Credit Party has incurred (whether under the Credit
Documents or otherwise), nor does any Credit Party intend to incur or
believe that it will incur, debts that will be beyond its ability to
pay (on a basis Consolidated with EOTT LLC and its Subsidiaries) as
such debts mature.
(x) Section 5(x) of the Disclosure Schedule contains a complete and correct
list, as of the date of this Agreement, of each credit agreement, loan
agreement, indenture, purchase agreement, guaranty or other arrangement
providing for or otherwise relating to any Indebtedness or any
extension of credit (or commitment for any extension of credit), or
guaranty by, any Credit Party, or to which any Credit Party is subject,
in excess of $1,000,000 with respect to any single Person and such
Person's Affiliates taken as whole, other than the Credit Documents.
The aggregate face amount outstanding or that may become outstanding
under each such arrangement is correctly described in Section 5(x) of
the Disclosure Schedule.
(y) The Credit Parties have delivered (or will have delivered by the
Closing Date) to the LC Agent and each of the LC Participants the
Post-Confirmation Projections. The Post-Confirmation Projections have
been prepared in good faith based on reasonable estimates and
assumptions, and on the basis of assumptions stated therein, and
reflect the reasonable estimates of the Borrowers of the results of
operations and other information projected therein.
(z) Subject to the rights of the Credit Parties set forth in the proviso
below, the Credit Parties acknowledge and agree that (i) they have no
claims or causes of actions against (a) the Prepetition Agent or any
Prepetition Lenders under the Prepetition Credit Agreement (or any
their directors, officers, employees, or agents) or (b) the DIP
Collateral Agent, the DIP LC Agent or any DIP LC Participants under the
DIP LC Agreement or the DIP Intercreditor Agreement, as applicable (or
any their directors, officers, employees, or agents), (ii) have no
offset right, counterclaim or defense of any kind against any of the
obligations, indebtedness or liabilities to the agent or the lenders
under the Prepetition Credit Agreement, the DIP LC Agreement or the DIP
Intercreditor Agreement, and (iii) the Prepetition Agent and the
Prepetition Lenders under the Prepetition Agreement, the DIP LC Agent
and the DIP LC Participants under the DIP LC Agreement and the DIP
Collateral Agent under the DIP Intercreditor Agreement have properly
performed and satisfied in a timely manner all of their obligations to
any Credit Party.
(aa) Section 5(aa) of the Disclosure Schedule contains a complete and
correct list, as of the date of this Agreement, of each commodity,
investment, securities and deposit account opened or maintained by each
of the Credit Parties.
(bb) No "Default" or "Event of Default" (as each such term is defined in the
Xxxxxx Credit Agreement) has occurred and is continuing, and there
exists no event or circumstance
58
that, with the passage of time or giving of notice, could result in a
"Default" or "Event of Default" (as defined in the Xxxxxx Credit
Agreement).
(cc) No "Default or "Event of Default" (as each such term is defined in the
Senior Notes Indenture) has occurred and is continuing, and there
exists no event or circumstance that, with the passage of time or
giving of notice could result in a "Default" or "Event of Default" (as
defined in the Senior Notes Indenture).
(dd) Each "Subsidiary Guarantor" (as such term is defined in the Senior
Notes Indenture) is a Guarantor hereunder.
6. AFFIRMATIVE COVENANTS. To conform with the terms and conditions under
which each LC Participant is willing to have Extensions of Credit outstanding to
Borrowers, and to induce each LC Participant to enter into this Agreement and to
make Extensions of Credit, the Credit Parties covenant and agree jointly and
severally that, from the date that this Agreement is executed and delivered by
the parties hereto until the full and final payment in cash of the Obligations
and the expiration or termination of all obligations to make Credit Extensions
hereunder and of all Letters of Credit, unless the Majority LC Participants have
previously agreed otherwise:
(a) Payment and Performance. Each Credit Party will pay
all amounts due under the Credit Documents to which it is a party in accordance
with the terms thereof and will observe, perform and comply with every covenant,
term and condition expressed in the Credit Documents to which it is a party.
(b) Payment of Expenses. All Borrower Expenses shall be
part of the Obligations. Borrower shall pay any Lender Party, on such Lender
Party's demand, any and all Borrower Expenses which such Lender Party may pay in
connection with the provisions hereof.
(c) Instruments, Documents, Securities or Chattel Paper.
Each Credit Party shall promptly notify the Collateral Agent of any instruments,
documents, securities or chattel paper that are owned or acquired by such Credit
Party. At any time and from time to time, upon the demand of the LC Agent, such
Credit Party shall deliver and pledge to the Collateral Agent, duly endorsed
and/or accompanied by such instruments of assignment and transfer in such form
and substance as the LC Agent may request, any and all instruments, documents,
securities and/or chattel paper which are included in the Collateral as the LC
Agent may request. Such Credit Party shall maintain and safeguard any and all
documents, instruments and chattel paper in its possession and its individual
books and records relating to the Collateral in a commercially reasonable manner
and cause the security interest granted herein to the Collateral Agent to be
marked thereon.
(d) Books, Financial Statements and Reports. Each Credit
Party will at all times maintain full and accurate books of account and records.
EOTT LLC will maintain and will cause its Subsidiaries to maintain a standard
system of accounting, will maintain its Fiscal Year and will furnish the
following statements and reports to the LC Agent at Borrowers' expense:
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(i) As soon as available, and in any event within 90 days
after the end of each Fiscal Year, commencing with Fiscal Year 2003 (A)
complete Consolidated balance sheets and statements of income and cash
flows of EOTT LLC as of, and for the period ending, December 31 of the
preceding year, together with all notes thereto, prepared in reasonable
detail in accordance with GAAP, together with an unqualified opinion,
based on an audit using generally accepted auditing standards, by
PricewaterhouseCoopers, or other independent certified public
accountants selected by EOTT and acceptable to the LC Agent, stating
that such Consolidated financial statements have been so prepared;
provided, however, that with respect to such balance sheets and
statements of income and cash flows as of, and for the period ending,
December 31, 2002, the opinion by such independent certified public
accountant may be subject to the following qualifications: (x)
qualification relating to issues between PBGC and the Credit Parties to
the extent disclosed in the Disclosure Schedule, and (y) qualification
relating to the Credit Parties' status as debtors and
debtors-in-possession under the Chapter 11 in the Bankruptcy Court, and
(B) consolidating unaudited balance sheets and statements of income of
each consolidated Subsidiary of EOTT LLC. The Consolidated financial
statements referred to in subclause (A) of the preceding sentence shall
set forth in comparative form the corresponding figures for the
preceding Fiscal Year for the corresponding predecessor entities. In
addition, within 90 days after the end of each Fiscal Year, commencing
with Fiscal Year 2003 EOTT LLC will furnish a certificate signed by
such accountants (1) stating that they have read this Agreement, and
(2) further stating that in making their examination and reporting on
the Consolidated financial statements described above they obtained no
knowledge of any Default existing at the end of such Fiscal Year, or,
if they did so conclude that a Default existed, specifying its nature
and period of existence.
(ii) As soon as available, and in any event within 45 days
after the end of each Fiscal Quarter of each Fiscal Year, (1) EOTT
LLC's unaudited Consolidated balance sheet as of the end of such Fiscal
Quarter and unaudited Consolidated statements of EOTT LLC's income and
cash flows for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year (or, in the case of each
Fiscal Quarter in 2003, from the date that the Reorganization Plan
becomes effective as described in Section 2(f)(i)(1)) to the end of
such Fiscal Quarter, (2) unaudited consolidating balance sheets and
statements of income of each consolidated Subsidiary as of (A) the end
of such Fiscal Quarter or (B) for such Fiscal Quarter and for the
period from the beginning of the then current Fiscal Year to the end of
such Fiscal Quarter, all in reasonable detail and prepared in
accordance with GAAP (subject to changes resulting from normal and
recurring adjustments made in conformity with GAAP), and as soon as
available, and in any event within 60 days after the end of the last
Fiscal Quarter of each Fiscal Year, EOTT LLC's unaudited Consolidated
balance sheet as of the end of such Fiscal Quarter and unaudited
Consolidated statement of income and operations for such Fiscal Quarter
and for the period from the beginning of the current Fiscal Year to the
end of such Fiscal Quarter.
(iii) As soon as available, and in any event within 45 days
after the end of each calendar month, (1) EOTT LLC's unaudited
Consolidated balance sheet as of the end of such month and an unaudited
Consolidated statement of EOTT LLC's income for such calendar month,
all in reasonable detail and prepared in accordance with GAAP (subject
60
to changes resulting from normal and recurring adjustments made in
conformity with GAAP) and (2) a volume report in the form attached
hereto as Exhibit G, setting forth for such month aggregate volumes for
all marketing and pipeline activities of all Credit Parties.
(iv) Together with each set of financial statements
furnished under subsections (i), (ii) and (iii) above, a certificate in
the form of Exhibit B signed by the chief financial officer or
treasurer of EOTT LLC stating that such financial statements are
accurate and complete in all material respects, stating that he or she
has reviewed the Credit Documents containing the calculations and
stating that no Default exists at the end of such Fiscal Quarter or
month, respectively, or at the time of such certificate or specifying
the nature and period of existence of any such Default.
(v) As soon as is available, and in any event no later
than 45 days after the end of Fiscal Year 2003, a business and
financial plan for EOTT LLC (in form and detail satisfactory to the LC
Agent), prepared or caused to be prepared by a senior financial officer
thereof, setting forth for Fiscal Year 2004, (1) monthly balance
sheets, income statements and statements of cash flows for the
following year, including the availability projections and plans for
personnel, capital expenditures and facilities and (2) a statement of
the material assumptions on which such plan is based.
(vi) On or about the fifth (5th) (but no later than the
eighth (8th)) and on or about the twentieth (20th) (but no later than
the twenty-third (23rd)) day of each calendar month and upon request by
the LC Agent, a Borrowing Base Report in the form of Exhibit C with
such supporting information in detail as may from time to time be
prescribed by the LC Agent, duly completed and certified by an
authorized officer of EOTT LLC as of the first day of such month if
delivered on or about the fifth (5th) day of a month, as of the
fifteenth (15th) day if delivered on or about the twentieth (20th) day
of a month, or as of the date otherwise requested. Each Borrowing Base
Report shall include (A) a detailed listing of each Borrower's Accounts
and Eligible Crude/Product/Liquid Deliveries; (B) a detailed listing of
the volumes of each such party's crude oil and NGLs and the location of
same; and (C) a listing of each such party's crude oil, refined
petroleum product or NGL repurchase transactions in place or executed
during the period covered by such report.
(vii) Promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent by
EOTT LLC to its unit holders and all registration statements,
prospectus supplements, periodic reports and other statements and
schedules filed by EOTT LLC with any securities exchange, the
Securities and Exchange Commission or any similar governmental
authority.
(viii) On the first Business Day of each month, (1) a Cash
Flow Report in the form of Exhibit D duly completed by an authorized
officer of EOTT LLC, for the immediately preceding month and (2) a
statement reconciling such report with the then-current Cash Budget.
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(ix) As soon as available, and in any event within 45 days
after the end of Fiscal Year 2003, an environmental compliance
certificate signed by the chief executive officer of EOTT LLC in the
form attached hereto as Exhibit E. Further, if requested by the LC
Agent, the Credit Parties shall permit and cooperate with an
environmental and safety review made in connection with the operations
of the Credit Parties' properties one time during each Fiscal Year, by
consultants selected by the LC Agent which review shall, if requested
by the LC Agent, be arranged and supervised by environmental legal
counsel for the LC Agent, all at the Credit Parties' cost and expense.
The consultant shall render an oral or written report, as specified by
the LC Agent, based upon such review at the Credit Parties' cost and
expense and a copy thereof will be provided to the Credit Parties.
(x) Concurrently with the annual renewal of the Credit
Parties' insurance policies, the Credit Parties shall at their own cost
and expense, if requested by the LC Agent in writing, cause a
certificate or report to be issued by the Credit Parties' professional
insurance consultants or other insurance consultants satisfactory to
the LC Agent certifying that the Credit Parties' insurance for the next
succeeding year after such renewal (or for such longer period for which
such insurance is in effect) complies with the provisions of this
Agreement and the Security Documents.
(xi) On or about the fifth (5th) (but no later than the
eighth (8th)) and on or about the twentieth (20th) (but no later than
the twenty-third (23rd)) day of each calendar month and upon request by
the LC Agent an Open Position Report in the form of Exhibit F, with
such supporting information in detail as may from time to time be
prescribed by the LC Agent, duly completed by an authorized officer of
EOTT LLC as of the last day of the preceding month if delivered on or
about the fifth (5th) day of a month, as of the fifteenth (15th) day if
delivered on or about the twentieth (20th) day of a month, or as of the
date otherwise requested. Such report shall include (a) net long or net
short fixed price crude oil positions, in total, and by delivery month
by grade or product, and (b) net long or net short ratably priced crude
oil positions, in total and by delivery month by grade or product.
(xii) On or before the tenth (10th) Business Day following
receipt by any Borrower or any other Credit Party, a copy of any
account statement received from any bank, securities intermediary,
commodities or futures broker or other institution with whom such
Borrower or such Credit Party maintains any deposit, investment,
trading or other account.
(xiii) Within 30 days after the end of each calendar month,
the Cash Budget, which should be in form and substance reasonably
satisfactory to the LC Agent.
(xiv) As soon as practicable, and in any case no later than
June 30, 2003, the Borrowers shall deliver to the LC Agent the
Consolidated balance sheet of EOTT LLC dated as of March 1, 2003,
reflecting the application of "fresh start" accounting, applied in
accordance with GAAP.
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(xv) Promptly, from time to time, such other information,
documents or reports regarding any Borrower or any other Credit Party
(including accountants' management letters and updates to the Cash
Budget) as the LC Agent may request, including any regulatory filings.
(e) Other Information and Inspections. In each case,
subject to the last sentence of this Section 6(e), each Credit Party will
furnish to each LC Participant any information that the LC Agent or any LC
Participant may from time to time request concerning any covenant, provision or
condition of the Credit Documents or any matter in connection with the Credit
Parties' businesses and operations. In each case, subject to the last sentence
of this Section 6(e), each Credit Party will permit representatives appointed by
the LC Agent (including independent accountants, auditors, agents, attorneys,
appraisers and any other Persons) to visit and inspect during normal business
hours any of such Credit Party's property, including its books of account, other
books and records and any facilities or other business assets, to make extra
copies therefrom and photocopies and photographs thereof and to write down and
record any information such representatives obtain, and each Credit Party shall
permit the LC Agent or its representatives to investigate and verify the
accuracy of the information furnished to the LC Agent or any LC Participant in
connection with the Credit Documents and to discuss all such matters with its
officers, employees and, upon prior notice to the Borrower Representative, its
representatives. Without limitation of the foregoing, at such reasonable times
and intervals as the LC Agent and the LC Participants shall request, Borrowers
shall permit the LC Agent and its representatives to conduct an audit,
examination, test and verification of the Collateral and the other business and
assets of the Credit Parties and in connection with such examination to have
full access to and the right to examine, audit, make abstracts and copies from
and inspect the Credit Parties' records, files, books of account and all other
documents, instruments and agreements to which any Credit Party is a party.
Borrowers shall pay all reasonable costs and expenses of the LC Agent associated
with any such audits. Additionally, at Borrowers' expense, from time to time the
LC Agent may require an inspection of the Collateral in storage at EOTT
Terminals to be conducted by an independent appraiser selected by the LC Agent.
Each of the foregoing audits, inspections and examinations shall be made subject
to compliance with applicable safety standards and the same conditions
applicable to any Credit Party in respect of property of that Credit Party on
the premises of Persons other than a Credit Party or an Affiliate of a Credit
Party, and all information, books and records furnished or requested to be
furnished, or of which copies, photocopies or photographs are made or requested
to be made, all information to be investigated or verified and all discussions
conducted with any officer, employee or representative of any Credit Party shall
be subject to any applicable attorney-client privilege exceptions that the
Credit Party reasonably determines is necessary and to compliance with
conditions to disclosures under non-disclosure agreements between any Credit
Party and Persons other than a Credit Party or an Affiliate of a Credit Party,
and subject further to the express undertaking of each Person acting at the
direction of or on behalf of the LC Agent to be bound by the confidentiality
provisions of Section 14(q).
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(f) Notice of Material Events and Change of Address. Each
Credit Party will notify each LC Participant, not later than five (5) Business
Days after any executive officer of such Credit Party has knowledge thereof,
stating that such notice is being given pursuant to this Agreement, of:
(i) the occurrence of any Material Adverse Change,
(ii) the occurrence of any Default or Event of Default,
(iii) the occurrence of any event or circumstance
constituting a "Default" or "Event of Default" (as such terms are
defined in the Xxxxxx Credit Agreement or the Senior Notes Indenture),
(iv) the acceleration of the maturity of any Indebtedness
owed by any Credit Party or of any default under any indenture,
mortgage, agreement, contract or other instrument to which any of them
is a party or by which any of them or any of their properties is bound,
if such default could cause a Material Adverse Change,
(v) the occurrence of any Termination Event,
(vi) under any Environmental Law, any claim of $1,000,000
or more, any notice of potential liability that might be reasonably
likely to exceed such amount or any other material adverse claim
asserted against any Credit Party or with respect to any Credit Party's
properties taken as a whole,
(vii) any material loss, damage, investigation, action,
suit, proceeding, claims, setoff, withholding or other defenses
relating to the Collateral or which could result in any Material
Adverse Change, and
(viii) the filing of any suit or proceeding, or the
assertion in writing of a claim against any Credit Party or with
respect to any Credit Party's properties.
Upon the occurrence of any of the foregoing, the Credit Parties will take all
necessary or appropriate steps to remedy promptly any such Material Adverse
Change, Default, Event of Default, acceleration, default or Termination Event to
protect against any such adverse claim, to defend any such suit or proceeding
and to resolve all controversies on account of any of the foregoing. The Credit
Parties will also notify the LC Agent and the LC Agent's counsel in writing at
least twenty (20) Business Days prior to the date that any Credit Party changes
its name or the location of its chief executive office or principal place of
business or the place where it keeps its books and records concerning the
Collateral, furnishing with such notice any necessary financing statement
amendments or requesting the LC Agent and its counsel to prepare the same.
(g) Maintenance of Properties. Each Credit Party will
maintain, preserve, protect and keep all Collateral and all other property used
or useful in the conduct of its business in good condition (ordinary wear and
tear excepted) and in material compliance with all applicable Laws and will from
time to time make all repairs, renewals and replacements
64
reasonably needed to enable the business and operations carried on in connection
therewith to be promptly and advantageously conducted at all times.
(h) Discharge of Liens. At its option, should any Credit
Party fail to do so, except to the extent permitted hereunder, the Collateral
Agent may discharge taxes, Liens or security interests or other encumbrances or
charges at any time levied or placed on the Collateral and may pay for the
insurance, maintenance and preservation of the Collateral. The Borrowers agree
to reimburse the Collateral Agent on demand, together with interest thereon at
the Alternate Base Rate, for any payment made or expense incurred by the
Collateral Agent in connection with the foregoing or otherwise under this
Agreement, and any such payment or expense shall constitute a part of the
Obligations secured by the Collateral.
(i) Landlord's Waiver. If any Collateral of material
value is or may become subject to a landlord's Lien (other than with respect to
the realty underlying pipelines, to the extent not typically obtained by lenders
taking a lien in similar assets), the applicable Credit Party shall, at the LC
Agent's request, furnish the Collateral Agent with a landlord's waiver
satisfactory in form and substance to the LC Agent.
(j) Maintenance of Existence and Qualifications. Each
Credit Party will maintain and preserve (i) its existence and (ii) its rights
and franchises in full force and effect and will qualify to do business in all
states or jurisdictions where required by applicable Law, other than, in the
case of clause (ii), as could not result in a Material Adverse Change.
(k) Payment of Trade Liabilities, Taxes, etc. Each Credit
Party will (i) timely file all required tax returns including any extensions;
(ii) timely pay all taxes, assessments and other governmental charges or levies
imposed upon it or upon its income, profits or property; (iii) within 120 days
after the date such goods are delivered or such services are rendered, pay all
Liabilities owed by it on ordinary trade terms to vendors, suppliers and other
Persons providing goods and services used by it in the ordinary course of its
business; (iv) pay and discharge when due all other Liabilities now or hereafter
owed by it, other than royalty payments suspended in the ordinary course of
business; and (v) maintain appropriate accruals and reserves for all of the
foregoing in accordance with GAAP. However, each Credit Party may delay paying
or discharging any of the foregoing so long as it has set aside on its books
adequate reserves therefor in accordance with GAAP and (i) it is in good faith
contesting the validity thereof by appropriate proceedings, if necessary or (ii)
it is in good faith contesting the validity of such Liability.
(l) Insurance. Each Credit Party shall at all times carry
insurance for all of its property (irrespective of whether such property is
owned or acquired before, on or after the Closing Date) with financially sound
and reputable insurers, of a character usually carried by responsible Persons
engaged in the same business or a business similarly situated against loss or
damage, of the kinds and in the amounts customarily carried by such Persons and
carry such other insurance as is usually carried by such Persons, including,
without limitation, insurance against its liability for injury to Persons (with
the LC Agent, the LC Participants and the Collateral Agent named as additional
insureds and the Collateral Agent as loss payee), all in amounts and of the type
currently carried by such Credit Party. All insurance policies covering
Collateral shall be endorsed (i) to provide for payment of losses to the
Collateral Agent, (ii) to
65
provide that such policies may not be canceled or reduced or affected in any
material manner for any reason without 15 days prior notice to the Collateral
Agent and (iii) to provide for any other matters specified in any applicable
Security Document or which the Collateral Agent may require.
(m) Performance on Borrowers' Behalf. If any Credit Party
fails to pay any taxes, insurance premiums, expenses, attorneys' fees or other
amounts it is required to pay under any Credit Document, the LC Agent may pay
the same after notice of such payment by the LC Agent is given to the Borrower
Representative. The Borrowers shall immediately reimburse the LC Agent for any
such payments and each amount paid by the LC Agent shall constitute an
Obligation owed hereunder that is due and payable on the date such amount is
paid by the LC Agent.
(n) Interest. The Borrowers hereby, on a joint and
several basis, agree to pay interest at the Default Rate on all Obligations
(including Obligations to pay fees or to reimburse or indemnify any LC
Participant) that Borrower has in this Agreement promised to pay to such LC
Participant and that are not paid when due. Such interest shall accrue from the
date such Obligations become due until they are paid.
(o) Compliance with Agreements and Law. Each Credit Party
will perform all material obligations it is required to perform under the terms
of each indenture, including in the case of EOTT LLC, the New Senior Notes,
mortgage, deed of trust, security agreement, lease and franchise and each
material agreement, contract or other instrument or obligation to which it is a
party or by which it or any of its properties is bound. Each Credit Party will
conduct its business and affairs in compliance with all Laws applicable thereto.
(p) Environmental Matters; Environmental Reviews.
(i) Each Credit Party will comply in all material
respects with all Environmental Laws now or hereafter applicable to
such Credit Party and any real estate owned, operated or leased thereby
as well as all contractual obligations and agreements with respect to
environmental remediation or other environmental matters and will
obtain, at or prior to the time required by applicable Environmental
Laws, all environmental, health and safety permits, licenses and other
authorizations necessary for its operations, will maintain such
authorizations in full force and effect, and will submit timely
applications for renewal of such permits, licenses and other
authorizations.
(ii) Each Credit Party will promptly furnish to the LC
Agent all written notices of violation, orders, claims, citations,
complaints, penalty assessments, suits or other proceedings received by
any such Credit Party after the date hereof, or of which it has notice
after the date hereof, pending or threatened against such Credit Party,
the potential liability of which exceeds $1,000,000 or could cause a
Material Adverse Change if resolved adversely against such Credit
Party, by any governmental authority with respect to any alleged
violation of or non-compliance with any Environmental Laws or any
permits, licenses or authorizations in connection with its ownership or
use of its properties or the operation of its business.
66
(iii) Each Credit Party will promptly furnish to the LC
Agent all requests for information, notices of claim, demand letters
and other notifications received after the date hereof by such Credit
Party in connection with its ownership or use of its properties or the
conduct of its business, relating to potential responsibility with
respect to any investigation or clean-up of Hazardous Material at any
location, the potential liability of which exceeds $1,000,000.
(q) Evidence of Compliance. Subject to the last sentence
of Section 6(e), each Credit Party will furnish to each LC Participant at such
Credit Party's expense all evidence which the LC Agent from time to time
requests in writing as to the accuracy and validity of or compliance with all
representations, warranties and covenants made by any Credit Party in the Credit
Documents, the satisfaction of all conditions contained therein and all other
matters pertaining thereto.
(r) Agreement to Deliver Security Documents. To further
secure the Obligations whenever requested by the LC Agent in its sole and
absolute discretion, the Credit Parties will deliver chattel mortgages, security
agreements, financing statements and other Security Documents in form and
substance satisfactory to the LC Agent for the purpose of granting, confirming
and perfecting first and prior Liens or security interests in any personal
property (tangible or intangible) now owned or hereafter acquired by any Credit
Party.
(s) Newly Created or Acquired Subsidiaries. Each
Subsidiary of EOTT created, acquired or coming into existence after the date
hereof shall, promptly upon the creation, acquisition or formation thereof,
execute and deliver to the LC Agent an instrument of joinder, in form and
substance satisfactory to the LC Agent, pursuant to which each new Subsidiary
(i) shall adopt, ratify, confirm and agree to perform and be bound by Section 10
hereof and the absolute and unconditional guaranty of the timely repayment of
the Obligations and the due and punctual performance of the obligations of the
Borrowers hereunder set forth therein, (ii) shall join the applicable Security
Documents as if such new Subsidiary was an original signatory thereto, and (iii)
shall deliver such other instruments and documents, including, without
limitation, perfection certificates, UCC financing statements and certificates
representing all of the issued and outstanding equity interests of such new
Subsidiary, in each case required to be executed or delivered pursuant to such
Security Documents in order to grant to or maintain the Collateral Agent's,
first-priority perfected security interest in and to the assets of and the
interests issued by such new Subsidiary. EOTT LLC will cause each such new
Subsidiary to deliver to the LC Agent, simultaneously with its delivery of such
an instrument of joinder, written evidence satisfactory to the LC Agent and its
counsel that such Subsidiary has taken all corporate, limited liability company
or partnership action necessary to duly approve and authorize its execution,
delivery and performance of such instrument and any other documents that it is
required to execute.
(t) Compliance with Agreements. Each Credit Party shall
observe, perform or comply with any term or condition under the Reorganization
Plan. In addition, each Credit Party shall observe, perform or comply with any
agreement with any Person or any term or condition of any instrument, if such
agreement or instrument is materially significant to such Credit Party or to
EOTT LLC on a Consolidated basis or materially significant to any Guarantor,
67
unless any such failure to so observe, perform or comply is remedied within the
applicable period of grace (if any) provided in such agreement or instrument.
(u) Risk Management Policies. During the term of this
Agreement, EOTT LLC will maintain in effect the Risk Management Policies and
adhere to and conduct its risk management activities, and cause the other Credit
Parties to adhere to and conduct their respective risk management activities, in
accordance with such policies. The Borrower Representative shall provide written
notice to the LC Agent of any changes to the Risk Management Policies that the
EOTT LLC board of managers adopts promptly upon the EOTT LLC board of directors'
action thereon, and in no event more than 30 days after approval by the EOTT LLC
board of directors of such changes.
(v) Retention of Financial Advisor and Commercial Finance
Audits. The Credit Parties acknowledge that the LC Agent and/or the LC Agent's
Special Counsel may continue to retain KPMG, or other advisors or consultants
(each an "ADVISOR") to, among other things, make visits to, and discuss
financial and operational matters with, the Borrowers and to advise the LC Agent
and the LC Participants as to business, operations and financial condition of
the Credit Parties. Any Advisor shall not be limited in the frequency of visits
to the facilities of the Credit Parties. The Credit Parties shall cooperate with
each Advisor and provide such Advisor with all information reasonably requested
by such Advisor in connection with its engagement by the LC Agent and/or the LC
Agent's Special Counsel. Upon the reasonable request of the LC Agent, the
Borrowers will obtain and deliver to the LC Agent, or, if the LC Agent so
elects, will cooperate with the LC Agent in the LC Agent's obtaining, a report
of an independent collateral auditor satisfactory to the LC Agent (which may be
affiliated with one of the LC Participants) with respect to some or all of the
assets included in the Borrowing Base or constituting Collateral, which report
shall indicate whether or not the information set forth in the Borrowing Base
Report most recently delivered is accurate and complete in all material respects
based upon (among other things) a review by such auditors of the accounts
receivable (including verification with respect to the amount, aging, identity
and credit of the respective Account Debtors and the billing practices of the
Borrowers) and inventory (including verification as to the value, location and
respective types). All such collateral value reports shall be conducted and made
at the expense of the Borrowers.
(w) The Credit Parties shall, on or prior to the second
Business Day after the Closing Date, cause the merger of EOTT MLP into EOTT OLP,
as contemplated in the Reorganization Plan.
7. NEGATIVE COVENANTS. To conform with the terms and conditions under
which each LC Participant is willing to have Extensions of Credit outstanding to
the Borrowers, and to induce each LC Participant to enter into this Agreement
and make the Extensions of Credit, the Credit Parties covenant and agree jointly
and severally that, from the date that this Agreement is executed and delivered
by the parties hereto until the full and final payment in cash of the
Obligations and the expiration or termination of all Letters of Credit, unless
the Majority LC Participants have previously agreed otherwise:
(a) Indebtedness. No Credit Party will in any manner owe
or be liable for Indebtedness except:
68
(i) the Obligations;
(ii) Indebtedness arising under Hedging Contracts
permitted under Section 7(d) or consisting of options, swaps, collars
and similar instruments that relate to crude oil, refined petroleum
products or NGLs that satisfy the requirements of subclauses (A), (B)
and (C) of the proviso to the definition of "Hedging Contracts";
(iii) Indebtedness of any Borrower owing to any other
Borrower;
(iv) Liabilities with respect to obligations to deliver
crude oil, refined petroleum products or NGLs or to render terminalling
or storage services in consideration for advance payments to a
Borrower; provided, however, such delivery or rendering, as applicable,
is to be made within 60 days after such payment;
(v) guaranties by EOTT LLC or any Borrower of trade
payables of any Borrower incurred and paid in the ordinary course of
business on ordinary trade terms;
(vi) any Indebtedness outstanding under the Purchase
Agreements;
(vii) Indebtedness existing under the "Note" (as defined in
the Enron Settlement Agreement not exceeding $6,250,000 in principal
amount, plus any deferred interest which is added to the principal
thereof in accordance with its terms);
(viii) any Indebtedness existing under the Xxxxxx Credit
Agreement not exceeding $75,000,000 in principal amount, less any
optional or mandatory prepayments or repayments of principal;
(ix) any Indebtedness existing under the New Senior Notes
not exceeding $114,660,000 ($10,660,000 of which must be
payment-in-kind notes issued in lieu cash payment of up to six months
interest on the New Senior Notes) in principal amount, provided that no
Credit Party shall make any payment of or distribution on account of
principal, or make any cash payment of interest, on any New Senior
Notes;
(x) Overdraft Obligations (as defined in the
Intercreditor Agreement) to Standard Chartered, not to exceed
$15,000,000;
(xi) Indebtedness under the promissory note to Big Warrior
Corporation in connection with the Big Warrior Settlement, not
exceeding $2,700,000 in principal amount; and
(xii) Indebtedness under promissory notes payable to the
order of the taxing authorities set forth in Section 7(a) of the
Disclosure Schedule with respect to tax liabilities of the Credit
Parties (or their predecessors, as the case may be) incurred prior to
the Closing Date and provided for in the Reorganization Plan, in
aggregate principal amount not exceeding $9,800,000.
69
(b) Accounts. No Credit Party shall, without the prior
written consent of the Majority LC Participants, open or maintain any commodity,
investment, securities or deposit accounts except for those listed on the
Disclosure Schedule.
(c) Limitation on Liens. No Credit Party will assign,
sell, mortgage, lease, transfer, set over, pledge, grant any security interest
in or Lien upon, encumber, or otherwise dispose of or abandon any Accounts,
inventory, cash, investment securities, margin deposit accounts with commodities
brokers or other rights or properties that constitute Collateral, whether now
owned or hereafter acquired, nor will any Credit Party permit any such Lien,
encumbrance or disposition to exist or occur with respect to such property,
except for (i) the sale from time to time in the ordinary course of business of
such property as may constitute inventory of such Credit Party, and (ii)
Permitted Liens. Except as provided in the Intercreditor Agreement, no Credit
Party shall abandon, forfeit, surrender, or release any rights in the Collateral
or enter into any operating, joint venture or similar agreement with respect to
the Collateral.
(d) Hedging Contracts. No Credit Party will be a party to
or in any manner be liable on any Hedging Contract, except Hedging Contracts to
hedge the Credit Parties' risk from fluctuations in commodity prices in the
ordinary course of business or pursuant to the Crude Oil Purchase Agreement.
(e) Limitation on Mergers, etc. and Issuances of
Securities. Except as expressly provided in this Section, no Credit Party will
(i) enter into any transaction of merger or consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), (ii) acquire any business or property from, or capital stock of,
or be a party to any acquisition of, any Person except for (1) purchases of
inventory and other property to be sold or used in the ordinary course of
business, and (2) Investments permitted under Section 7(h) or (iii) sell,
transfer, lease, exchange, alienate or otherwise dispose of, in one transaction
or a series of transactions, any part of its business or property, whether now
owned or hereafter acquired, except for sales or transfers not prohibited by
Section 7(f). EOTT LLC will not issue any securities other than membership
interests and any options or warrants giving the holders thereof only the right
to acquire such interests. No Subsidiary of EOTT LLC will issue any additional
partnership or limited liability company interests or shares of its capital
stock or other securities or any options, warrants or other rights to acquire
such additional partnership or limited liability company interests or shares or
other securities, except that a direct Subsidiary of a Credit Party may issue
additional partnership or limited liability company interests or shares or other
securities to such Credit Party or to EOTT LLC so long as such Subsidiary is a
Wholly Owned Subsidiary of EOTT LLC after giving effect thereto. No Subsidiary
of a Borrower which is a partnership will allow any diminution of such
Borrower's interest (direct or indirect) therein.
(f) Limitation on Asset Sales. No Credit Party will sell,
transfer, lease, exchange, alienate or dispose of any Collateral or any of its
assets or properties or any interest therein, including pursuant to any
sale/leaseback transaction, except:
(i) equipment that is worthless or obsolete or no longer
necessary or useful to the proper conduct of its business or that is
replaced by equipment of equal suitability and value;
70
(ii) (x) inventory (including pipeline linefill) sold in
the ordinary course of business on ordinary trade terms and (y) such
inventory sold pursuant to the Crude Oil Purchase Agreement (including
documents of title delivered to SCTSC in connection therewith and all
proceeds thereof);
(iii) Accounts, contract rights and any proceeds thereof
sold pursuant to the Receivables Purchase Agreement;
(iv) other dispositions of assets not exceeding (A)
$250,000 for any individual disposition or series of related
dispositions and (B) $1,000,000 in aggregate amount for all such
dispositions during any fiscal year of the Borrowers; and
(v) the disposition of the Designated Assets for cash, on
terms and conditions satisfactory to the LC Agent, provided that the
net proceeds therefrom shall be applied in accordance with the Cash
Waterfall.
All proceeds of any such sales shall be paid directly to the Collateral Agent as
provided for in the Intercreditor Agreement. No Credit Party will sell, transfer
or otherwise dispose of capital stock of or partnership or other interests in
any of its Subsidiaries except to EOTT LLC or a Wholly Owned Subsidiary of EOTT
LLC. No Credit Party will discount, sell, pledge or assign any notes payable to
it, Accounts or future income. The Collateral Agent will, at the Borrower
Representative's request and expense, execute a release, satisfactory to the
Borrower Representative and the LC Agent, of any Collateral so sold,
transferred, leased, exchanged, alienated or disposed of in compliance with this
Section 7(f).
(g) Limitation on Distributions, Dividends and
Redemptions. No Credit Party will declare or pay any dividends on, or make any
other distribution of any kind in respect of, any class of its capital stock or
any partnership, limited liability company or other interest in it, nor will any
Credit Party directly or indirectly make any capital contribution of any nature
to, or purchase, redeem, acquire or retire any shares of the capital stock of,
or partnership or limited liability company interests in, any Credit Party
(whether such interests are now or hereafter issued, outstanding or created), or
cause or permit any reduction or retirement of the capital stock of any Credit
Party, while any Obligations are outstanding. Notwithstanding the foregoing,
Subsidiaries of a Borrower shall not be restricted, directly or indirectly, from
declaring and paying dividends or making any other distributions to such
Borrower.
(h) Limitation on New Businesses, Investments and Capital
Expenditures. No Credit Party will (i) make any expenditure or commitment or
incur any obligation or enter into or engage in any transaction except in the
ordinary course of business and transactions contemplated by the Purchase
Agreements, (ii) engage directly or indirectly in any business or conduct any
operations except in connection with or incidental to its present business and
operations, (iii) make any capital contributions to or other Investments in any
Person, other than Permitted Investments, or (iv) make or incur any Capital
Expenditures other than Permitted Capital Expenditures and, to the extent
required to be reflected as a Capital Expenditure pursuant to GAAP, payments
made with respect to the Big Warrior Settlement. All transactions permitted
under this Section are subject to Section 7(f).
71
(i) Limitation on Credit Extensions. Except for Permitted
Investments and Hedging Contracts permitted under Section 7(d), no Credit Party
will extend credit, make advances or make loans other than normal and prudent
extensions of credit to customers buying goods and services in the ordinary
course of business or to another Credit Party in the ordinary course of
business, which extensions shall not be for longer periods than those extended
by similar businesses operated in a normal and prudent manner.
(j) Transactions with Affiliates. No Credit Party will
engage in any transaction with any Affiliate (other than a Borrower or a
Guarantor) on terms more favorable to such Person than would have been
obtainable on an arms'-length basis in the ordinary course of business. Further,
no Credit Party will engage in any material transaction with Enron or any of its
Affiliates, except as contemplated in the Enron Settlement Agreement and the
Employee Transition Agreement.
(k) Prohibited Contracts. Except as expressly provided
for in the Credit Documents and as described in the Disclosure Schedule, no
Credit Party will, directly or indirectly, enter into, create or otherwise allow
to exist any contract or other consensual arrangement restricting the ability of
any Subsidiary of EOTT LLC, including but not limited to any Borrower to: (i)
pay dividends or make other distributions, (ii) purchase or redeem equity
interests held in it by any Borrower or EOTT LLC, (iii) repay loans and other
Indebtedness owing by it to any Borrower or EOTT LLC, (iv) transfer any of its
assets to any Borrower or EOTT LLC or (v) create, incur, assume or suffer to
exist any Lien upon its property or assets to secure the Obligations. No Credit
Party will enter into any "take-or-pay" contract or other contract or
arrangement for the purchase of goods or services that obligates it to pay for
such goods or service regardless of whether they are delivered or furnished to
it other than contracts for pipeline capacity or for services in either case
reasonably anticipated to be utilized in the ordinary course of business. No
ERISA Affiliate will incur any obligation to contribute to any "multiemployer
plan" as defined in Section 4001 of ERISA that is subject to Title IV of ERISA.
No Credit Party shall prepay the principal of, or purchase, redeem or otherwise
acquire or retire for value, any of the New Senior Notes.
(l) Modification of Certain Agreements. No Credit Party
will amend, modify, or permit any amendment or modification to (i) its
partnership agreement, limited liability company agreement, certificate of
formation, certificate of incorporation or other Organizational Document, as
applicable (other than solely to effect the merger of EOTT MLP and EOTT OLP),
(ii) the Senior Notes Indenture, or (iii) any contract or lease, that releases,
qualifies, limits, makes contingent or otherwise detrimentally affects the
rights and benefits of the LC Agent or any other Lender Party under or acquired
pursuant to any Security Documents.
(m) Open Positions. The Credit Parties shall at all times
limit their Open Positions in accordance with the Risk Management Policies as
from time to time in effect.
(n) Redelivery of Borrowing Base Report. If any contract
gives rise to an Eligible Receivable that is reflected in a Borrowing Base
Report representing the obligation to deliver crude oil in the month next
succeeding the month in which the Borrowing Base Report is delivered, and such
contract is modified, sold or exchanged in any way that would negatively affect
the Borrowing Base, then the Borrower Representative shall immediately (i)
deliver to the
72
LC Agent a revised Borrowing Base Report satisfactory to the LC Agent and (ii)
make any prepayment as may be required under Section 2(h) resulting from such
reduced Borrowing Base.
(o) Books and Records. No Credit Party shall permit any
material change in the accounting treatment or reporting practices of each
Credit Party from those used in preparation of the financial statements
referenced in Section 6(d), except as required under GAAP.
(p) Minimum Consolidated EBIDA. The Borrowers shall not
permit Consolidated EBIDA to be less than the following for the Reference
Periods ending on the dates set forth below:
Minimum
Reference Period Ended Consolidated EBIDA
---------------------- ------------------
January 31, 2003 $ 0
February 28, 2003 $ 0
March 31, 2003 $ 0
April 30, 2003 $ 0
May 31, 2003 $ 750,000
June 30, 2003 $ 1,678,000
July 31, 2003 $ 3,403,000
August 31, 2003 $ 5,098,000
September 30, 2003 $ 6,551,000
October 31, 2003 $ 8,680,000
November 30, 2003 $ 10,440,000
December 31, 2003 $ 12,684,000
January 31, 2004 $ 15,969,000
February 29, 2004 $ 15,670,000
March 31, 2004 $ 16,895,000
April 30, 2004 $ 16,532,000
May 31, 2004 $ 16,531,000
June 30, 2004 $ 17,333,000
July 31, 2004 $ 16,972,000
August 31, 2004 $ 17,386,000
September 30, 2004 $ 16,998,000
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(q) Minimum Consolidated Tangible Net Worth. The
Borrowers will not permit Consolidated Tangible Net Worth to be less than the
amounts set forth as of each of the corresponding dates set forth below:
Minimum Consolidated
Date Tangible Net Worth
------------------ --------------------
March 31, 2003 $ 8,500,000
April 30, 2003 $ 8,500,000
May 31, 2003 $ 8,500,000
June 30, 2003 $ 8,500,000
July 31, 2003 $ 8,500,000
August 31, 2003 $ 8,500,000
September 30, 2003 $ 8,500,000
October 31, 2003 $ 8,500,000
November 30, 2003 $ 8,500,000
December 31, 2003 $ 8,500,000
January 31, 2004 $ 10,000,000
February 29, 2004 $ 10,000,000
March 31, 2004 $ 10,000,000
April 30, 2004 $ 10,000,000
May 31, 2004 $ 10,000,000
June 30, 2004 $ 10,000,000
July 31, 2004 $ 10,000,000
August 31, 2004 $ 10,000,000
September 30, 2004 $ 10,000,000
(r) Interest Coverage. The Borrowers will not permit the
ratio of (a) Consolidated EBIDA for any Reference Period ending on a date set
forth below to (b) Consolidated Total Interest Expense for such period, to be
less than the ratio corresponding to such date set forth:
Consolidated EBIDA
to Consolidated Total
Date Interest Expense
------------------ ----------------------
January 31, 2003 0.00 : 1.00
February 28, 2003 0.00 : 1.00
March 31, 2003 0.00 : 1.00
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Consolidated EBIDA
to Consolidated Total
Date Interest Expense
------------------ ---------------------
April 30, 2003 0.00 : 1.00
May 31, 2003 0.07 : 1.00
June 30, 2003 0.16 : 1.00
July 31, 2003 0.33 : 1.00
August 31, 2003 0.49 : 1.00
September 30, 2003 0.62 : 1.00
October 31, 2003 0.79 : 1.00
November 30, 2003 0.93 : 1.00
December 31, 2003 1.11 : 1.00
January 31, 2004 1.36 : 1.00
February 29, 2004 1.35 : 1.00
March 31, 2004 1.36 : 1.00
April 30, 2004 1.34 : 1.00
May 31, 2004 1.34 : 1.00
June 30, 2004 1.40 : 1.00
July 31, 2004 1.37 : 1.00
August 31, 2004 1.42 : 1.00
September 30, 2004 1.21 : 1.00
(s) Current Ratio. The Borrowers will not permit the
ratio of Consolidated Current Assets to Consolidated Current Liabilities to be
less than the ratios set forth below as of each of the corresponding dates set
forth below:
Consolidated Current
Assets to Consolidated
Date Current Liabilities
------------------ ----------------------
January 31, 2003 0.77 : 1.00
February 28, 2003 0.78 : 1.00
March 31, 2003 0.90 : 1.00
April 30, 2003 0.90 : 1.00
May 31, 2003 0.90 : 1.00
June 30, 2003 0.90 : 1.00
July 31, 2003 0.90 : 1.00
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Consolidated Current
Assets to Consolidated
Date Current Liabilities
------------------ ----------------------
August 31, 2003 0.90 : 1.00
September 30, 2003 0.90 : 1.00
October 31, 2003 0.90 : 1.00
November 30, 2003 0.90 : 1.00
December 31, 2003 0.90 : 1.00
January 31, 2004 0.90 : 1.00
February 29, 2004 0.90 : 1.00
March 31, 2004 0.90 : 1.00
April 30, 2004 0.90 : 1.00
May 31, 2004 0.90 : 1.00
June 30, 2004 0.90 : 1.00
July 31, 2004 0.90 : 1.00
August 31, 2004 0.90 : 1.00
September 30, 2004 0.90 : 1.00
(t) Compliance with Environmental Laws. Other than as set
forth in Section 7(t) of the Disclosure Schedule, no Credit Party will (a) use
or allow the use of any real property owned, operated or leased by any Credit
Party or any portion thereof for the handling, processing, storage or disposal
of Hazardous Substances, (b) cause or permit to be located on any real property
owned, operated or leased by any Credit Party any underground tank or other
underground storage receptacle for Hazardous Substances, (c) generate any
Hazardous Substances on any real property owned, operated or leased by any
Credit Party, (d) conduct any activity at or use any real property owned,
operated or leased by any Credit Party in any manner so as to cause a release
(i.e. releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, disposing or dumping) or threatened
release of Hazardous Substances on, upon or into the environment or (e)
otherwise conduct any activity at or use any real property owned, operated or
leased by any Credit Party; in each case, in any manner that would violate any
Environmental Law or cause any Credit Party to incur or be subject to any
liability under any Environmental Law, other than violations and liabilities
that could not, in the aggregate, result in a Material Adverse Change.
8. EVENTS OF DEFAULT. Each of the following events constitutes an Event of
Default under this Agreement:
(a) Borrower fails to pay any Obligations with respect to any Matured LC
Obligations when due and payable;
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(b) Any Credit Party fails to pay any Obligation (other than the
Obligations in subsection (a) above) when due and payable, whether at a
date for the payment of a fixed installment or as a contingent or other
payment becomes due and payable or as a result of acceleration or
otherwise, within three Business Days after the same becomes due;
(c) Any event defined as a "default" or "event of default" in any Credit
Document (other than this Agreement and such "events of default" that
are defined to have occurred upon the occurrence of Events of Default
hereunder) occurs, and the same is not remedied within the applicable
period of grace (if any) provided in such Credit Document;
(d) Any Credit Party fails to duly observe, perform or comply with any
covenant, agreement or provision of Section 2(a)(ii), Section 2(h),
Section 6(f), Section 6(g), Section 6(l), or Section 7;
(e) Any Credit Party fails (other than as referred to in subsection (a),
(b), (c) or (d) above) to duly observe, perform or comply with any
covenant, agreement, condition or provision of any Credit Document to
which it is a party, and such failure remains unremedied for a period
of 5 Business Days after written notice of such failure from the LC
Agent to the Borrower Representative;
(f) Any representation or warranty previously, presently or hereafter made
or deemed made in writing by or on behalf of any Credit Party in
connection with any Credit Document shall prove to have been false or
incorrect in any material respect on any date on or as of which made or
deemed made, or any Credit Document at any time ceases to be valid,
binding and enforceable as warranted in Section 5(c) for any reason
other than its release or subordination by all LC Participants;
(g) Any Credit Party (x) shall default in the payment when due of any
principal of or interest on any Indebtedness in excess of $2,500,000 in
the aggregate (other than Indebtedness the validity of which is being
contested in good faith by appropriate proceedings and for which
adequate reserves with respect thereto are maintained on the books of
such Credit Party in accordance with GAAP), or (y) any event specified
in any note, agreement, indenture, mortgage, deed of trust, security
agreement or other document evidencing or relating to any such
Indebtedness shall occur if the effect of such event is to cause, or
(with the giving of any notice or the lapse of time or both) to permit
the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause, such Indebtedness to become
due, or to be prepaid in full (whether by redemption, purchase, offer
to purchase or otherwise), prior to its stated maturity;
(h) There shall occur a "Default" or an "Event of Default" (as such terms
are defined in the Xxxxxx Credit Agreement or the Senior Notes
Indenture), and the same shall not be remedied within the applicable
period of grace (if any) provided for in the Xxxxxx Credit Agreement or
Senior Notes Indenture, as applicable;
(i) Any Credit Party:
(i) has entered against it a judgment, decree or order
for relief by a court of competent jurisdiction in an involuntary
proceeding commenced under any applicable
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bankruptcy, insolvency or other similar law of any jurisdiction now or
hereafter in effect, including the Bankruptcy Code, as from time to
time amended, or has any such proceeding commenced against it, in each
case, which remains undismissed for a period of 60 days;
(ii) commences a voluntary case under any applicable
bankruptcy, insolvency or similar law now or hereafter in effect,
including the Bankruptcy Code, as from time to time amended; or applies
for or consents to the entry of an order for relief in an involuntary
case under any such law; or makes a general assignment for the benefit
of creditors; or is generally unable to pay (or admits in writing its
inability to so pay) its debts as such debts become due; or takes
corporate, partnership, limited liability company or other action to
authorize any of the foregoing;
(iii) has entered against it the appointment of or taking
of possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of any part of the Collateral of a
value in excess of $2,500,000 in a proceeding brought against or
initiated by it, and such appointment or taking of possession is
neither made ineffective nor discharged within 60 days after the making
thereof, or such appointment or taking possession is at any time
consented to, requested by or acquiesced to by it;
(iv) has entered against it a final judgment for the
payment of money in excess of $2,500,000 (in each case not covered by
insurance satisfactory to the LC Agent in its sole discretion), unless
the same is stayed or discharged within 30 days after the date of entry
thereof or an appeal or appropriate proceeding for review thereof is
taken within such period and a stay of execution pending such appeal is
obtained;
(v) suffers a writ or warrant of attachment or similar
process to be issued by any Tribunal against all or any substantial
part of its assets or any part of the Collateral of a value in excess
of $2,500,000, and such writ or warrant of attachment or similar
process is not stayed or released within 30 days after the entry or
levy thereof or after any stay is vacated or set aside;
(vi) any Termination Event shall occur with respect to (A)
the ERISA Plan known as the "Enron Corp. Cash Balance Plan" resulting
in the incurrence of Liability by any Credit Party or (B) any other
ERISA Plan of any Credit Party, any Subsidiary of any Credit Party or
any of their respective ERISA Affiliates;
(j) Any Change in Control occurs;
(k) Any Borrower (i) maintains in effect Risk Management Policies that are
not Currently Approved by the LC Agent or (ii) fails to adhere to or
conduct its risk management activities, or cause any other Credit Party
to adhere to or conduct their respective risk management activities, in
accordance with the Risk Management Policies as in effect from time to
time;
(l) Any Material Adverse Change occurs;
(m) Any of the Borrowers shall be enjoined from conducting any part of its
business;
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(n) Any event defined as a "default" or "event of default" in either of the
Purchase Agreements occurs and is not remedied within the applicable
period of grace (if any) provided in such Purchase Agreements;
(o) Any Credit Party shall breach any of its obligations under the
Reorganization Plan; or
(p) Any Credit Party, without the prior written consent of the LC Agent and
the LC Participants, breach, modify, terminate, amend, appeal or seek
to vacate the Confirmation Order.
9. RIGHTS AND REMEDIES. Upon the occurrence and during the continuance of
any Event of Default, the LC Agent may, and upon the direction of the Majority
LC Participants shall, by notice to the Borrower Representative declare all or
any portion of the LC Obligations and other Obligations to be due and payable
and/or the commitment to extend credit to the Borrowers (if not theretofore
terminated) to be terminated, whereupon the full unpaid amount of such
Obligations which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or presentment,
and/or, as the case may be, the commitment to extend credit to the Borrowers
shall terminate, provided, that in the event of any Event of Default specified
in Section 8(i)(i) or (ii), all such amounts shall become immediately due and
payable automatically without any requirement of notice from the LC Agent. In
addition, pursuant to Section 2.3(a) of the Intercreditor Agreement, if the
obligations under the Xxxxxx Credit Agreement are accelerated as a result of a
continuing "Event of Default" thereunder, the LC Agent, upon the direction of
the Majority LC Participants, shall by notice to the Borrower Representative
declare all or any portion of the Obligations to be due and payable at the same
time as the obligations under the Xxxxxx Credit Agreement, whereupon the full
unpaid amount of such Obligations which shall be so declared due and payable
shall be and become immediately due and payable, without further notice, demand
or presentment. In accordance with the Intercreditor Agreement, the LC Agent
shall not exercise certain of its remedies without the consent of the Required
Secured Parties (as defined in the Intercreditor Agreement).
10. GUARANTY.
(a) Each Guarantor hereby jointly and severally, irrevocably, absolutely
and unconditionally guarantees to the LC Participants and the LC Agent
the prompt, complete and full payment and performance when due, no
matter how the same shall become due, of all Obligations, including but
not limited to:
(i) All obligations of the Credit Parties to make
reimbursements and other payments to LC Participants or the LC Agent in
respect of Letters of Credit issued;
(ii) All other sums payable under this Agreement and the
other Credit Documents, whether for principal, interest, fees or
otherwise; and
(iii) Any and all other Indebtedness, obligations or
Liabilities that may at any time be owed by any Credit Party to the LC
Participants, whether incurred heretofore or hereafter or concurrently
herewith, under or pursuant to any of the Credit Documents,
79
and including interest, attorneys' fees and collection costs as may be
provided by Law or in any instrument evidencing any such Indebtedness
or Liability.
Without limiting the generality of the foregoing, the Guarantors' liability
hereunder shall extend to and include all postpetition interest, expenses and
other Liabilities of Borrowers described above in this subsection (a), or below
in the following subsection (b), which would be owed by Borrowers but for the
fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving a Borrower.
(b) If Borrowers shall for any reason fail to pay any Obligation described
in Section 10(a), as and when such Obligation shall become due and
payable, whether at its stated maturity, as a result of the exercise of
any power to accelerate, or otherwise, the Guarantors will, forthwith
upon demand by the LC Agent, pay such Obligation in full to the
Collateral Agent for the account of the LC Participants.
(c) If any Guarantor fails to pay any obligation as described in the
immediately preceding subsections (a) or (b), each Guarantor will incur
the additional joint and several obligation to pay to the Collateral
Agent for the account of the LC Agent, and the Guarantors will
forthwith upon demand by the LC Agent pay to the Collateral Agent for
the account of the LC Agent, the amount of any and all expenses,
including fees and disbursements of the LC Agent's counsel and of any
experts or agents retained by the LC Agent that the LC Agent may incur
as a result of such failure.
(d) As between the Guarantors and LC Participants, this guaranty shall be
considered a primary and liquidated Liability of the Guarantors.
(e) Each Guarantor hereby waives all defenses based on suretyship and
agrees that its obligations shall continue and the enforceability
thereof against such Guarantor shall not be affected by:
(i) any waiver, delay or failure of any LC Participant to
exercise or to exhaust any right or remedy or to bring any right or
remedy or action against the Borrowers, the Collateral or any other
security available to the LC Participants in connection with the
Obligations;
(ii) any extension, renewal, settlement, compromise,
modification, amendment, consent, waiver or release in any respect,
arising under or in connection with any of the Obligations;
(iii) the existence of any claim, set-off, or other rights
that any Borrower may have at any time against any Lender Party,
whether in connection with the Obligations or any unrelated
transactions;
(iv) any invalidity or unenforceability relating to or
against any Borrower, for any reason, of any of the Obligations or any
agreement relating thereto;
(v) any Event of Default; or
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(vi) any other act or failure to act or delay of any kind
by any Borrower or Lender Party or any other circumstance whatsoever
which might, but for the provisions hereof, constitute a defense
available to, or a legal or equitable discharge of, the Borrowers.
(f) The obligations of each Guarantor hereunder shall continue to be
effective or be reinstated, as the case may be, if at any time,
payment, or any part thereof, of any obligation or interest thereon is
rescinded or must otherwise be restored by any Lender Party in
connection with the bankruptcy of any of the Borrowers.
(g) Each Guarantor hereby waives promptness, diligence, presentment, demand
of payment, protest, order and receipt of any notice in connection with
its obligations hereunder.
11. LC AGENT.
(a) Appointment and Authority. Each Lender Party hereby
irrevocably authorizes the LC Agent, and the LC Agent hereby undertakes, to
receive payments of principal, interest and other amounts due hereunder as
specified herein and to take all other actions and to exercise such powers under
the Credit Documents as are specifically delegated to the LC Agent by the terms
hereof or thereof, together with all other powers reasonably incidental thereto.
The relationship of the LC Agent to the other Lender Parties is only that of one
commercial lender acting as agent for others, and nothing in the Credit
Documents shall be construed to constitute the LC Agent a trustee or other
fiduciary for any Lender Party, nor to impose on the LC Agent duties and
obligations other than those expressly provided for in the Credit Documents.
With respect to any matters not expressly provided for in the Credit Documents
and any matters that the Credit Documents place within the discretion of the LC
Agent, the LC Agent shall not be required to exercise any discretion or take any
action, and it may request instructions from the Lender Parties with respect to
any such matter, in which case it shall be required to act or to refrain from
acting (and shall be fully protected and free from liability to all Lender
Parties in so acting or refraining from acting) upon the instructions of the
Majority LC Participants (including itself); provided, however, that the LC
Agent shall not be required to take any action that exposes it to a risk of
personal liability that it considers unreasonable or which is contrary to the
Credit Documents or to applicable Law. Upon receipt by the LC Agent from the
Borrower Representative of any communication calling for action on the part of
the LC Participants or upon notice from the Borrower Representative or any LC
Participant to the LC Agent of any Default or Event of Default, the LC Agent
shall promptly notify each other LC Participant thereof.
(b) Exculpation, the LC Agent's Reliance, etc. Neither
the LC Agent nor any of its directors, officers, agents, attorneys or employees
shall be liable for any action taken or omitted to be taken by any of them under
or in connection with the Credit Documents, including their negligence of any
kind, except that each shall be liable for its own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, the LC Agent (i)
may consult with legal counsel (including counsel for the Borrowers),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (ii) makes
no warranty or representation to any other Lender Party and shall not be
responsible to
81
any other Lender Party for any statements, warranties or representations made in
or in connection with the Credit Documents; (iii) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of the Credit Documents on the part of any Credit Party
or to inspect the property (including the books and records) of any Credit
Party; (iv) shall not be responsible to any other Lender Party for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Credit Document or any instrument or document furnished in connection
therewith; (v) may rely upon the representations and warranties of each Credit
Party or Lender Party in exercising its powers hereunder; and (vi) shall incur
no Liability under or in respect of the Credit Documents by acting upon any
notice, consent, certificate or other instrument or writing (including any
facsimile, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper Person or Persons.
(c) Credit Decisions. Each Lender Party acknowledges that
it has, independently and without reliance upon any other Lender Party, made its
own analysis of the Borrowers and the transactions contemplated hereby and its
own independent decision to enter into this Agreement and the other Credit
Documents. Each Lender Party also acknowledges that it will, independently and
without reliance upon any other Lender Party and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Documents.
(d) Indemnification. Each LC Participant agrees to
indemnify the LC Agent (to the extent not reimbursed by the Borrowers within ten
(10) days after demand) from and against such LC Participant's Percentage Share
of any and all Liabilities and costs which to any extent (in whole or in part)
may be imposed on, incurred by or asserted against the LC Agent growing out of,
resulting from or in any other way associated with any of the Collateral, the
Credit Documents and the transactions and events (including the enforcement
thereof) at any time associated therewith or contemplated therein (whether
arising in contract or in tort or otherwise and including any violation or
noncompliance with any Environmental Laws by any Person or any Liabilities or
duties of any Person with respect to Hazardous Materials found in or released
into the environment). The foregoing indemnification shall apply whether or not
such Liabilities and costs are in any way or to any extent owed, in whole or in
part, under any claim or theory of strict Liability or caused, in whole or in
part, by any negligent act or omission of any kind by the LC Agent; provided,
however, only that no LC Participant shall be obligated under this Section to
indemnify the LC Agent for that portion, if any, of any Liabilities and costs
proximately caused by the LC Agent's own individual gross negligence or willful
misconduct, as determined in a final judgment. Cumulative of the foregoing, each
LC Participant agrees to reimburse the LC Agent promptly upon demand for such LC
Participant's Percentage Share of any costs and expenses to be paid to the LC
Agent by Borrowers under this Agreement to the extent that the LC Agent is not
timely reimbursed for such expenses by Borrowers as provided for herein. As used
in this Section, the term "THE LC AGENT" shall refer not only to the Person
designated as such in Section 1 but also to each director, officer, agent,
attorney, employee, representative and Affiliate of such Person.
(e) Rights as LC Participant. In its capacity as an LC
Participant, the LC Agent shall have the same rights and obligations as any LC
Participant and may exercise such rights as though it were not the LC Agent. The
LC Agent may accept deposits from, lend money
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to, act as trustee under indentures of and generally engage in any kind of
business with any Credit Party or their Affiliates, all as if it were not the LC
Agent hereunder and without any duty to account therefor to any other LC
Participant.
(f) Sharing of Set-Offs and Other Payments. Each Lender
Party agrees that if it shall, whether through the exercise of rights under any
Security Document or rights of banker's Lien, set-off or counterclaim against
any of the Borrowers or otherwise, obtain payment of a portion of the aggregate
Obligations owed to it which, taking into account all distributions made by the
LC Agent under Section 2(i), causes such Lender Party to have received more than
it would have received had such payment been distributed by the LC Agent
pursuant to Section 2(i), then (i) it shall be deemed to have simultaneously
purchased and shall be obligated to purchase interests in the Obligations as
necessary to cause all Lender Parties to share all payments and (ii) such other
adjustments shall be made from time to time as shall be equitable to ensure that
the LC Agent and all Lender Parties share all payments of Obligations as
provided in Section 2(i); provided, however, that nothing herein contained shall
in any way affect the right of any Lender Party to obtain payment (whether by
exercise of rights of banker's Lien, set-off or counterclaim or otherwise) of
Indebtedness other than the Obligations. The Borrowers expressly consent to the
foregoing arrangements and agree that any holder of any such interest or other
participation in the Obligations, whether or not acquired pursuant to the
foregoing arrangements, may to the fullest extent permitted by Law and, subject
to the Intercreditor Agreement, exercise any and all rights of banker's Lien,
set-off or counterclaim as fully as if such holder were a holder of the
Obligations in the amount of such interest or other participation. If all or any
part of any funds transferred pursuant to this Section is thereafter recovered
from the seller under this Section which received the same, the purchase
provided for in this Section shall be deemed to have been rescinded to the
extent of such recovery, together with interest, if any, if interest is required
pursuant to the order of a Tribunal to be paid on account of the possession of
such funds prior to such recovery.
(g) Investments. Whenever the LC Agent in good faith
determines that it is uncertain about how to distribute to the Lender Parties,
any funds that it has received, or whenever the LC Agent in good faith
determines that there is any dispute among the Lender Parties about how such
funds should be distributed, the LC Agent may choose to defer distribution of
the funds that are the subject of such uncertainty or dispute. If the LC Agent
in good faith believes that the uncertainty or dispute will not be promptly
resolved, or if the LC Agent is otherwise required to invest funds pending
distribution to the Lender Parties, the LC Agent shall invest such funds pending
distribution, and all interest on any such Investment shall be distributed upon
the distribution of such Investment in the same proportion and to the same
Persons as such Investment. All moneys received by the LC Agent for distribution
to the Lender Parties (other than to the Person who is the LC Agent in its
separate capacity as Lender Party) shall be held by the LC Agent pending such
distribution solely as the LC Agent for such Lender Parties, and the LC Agent
shall have no equitable title to any portion thereof.
(h) Benefit of this Section. The provisions of this
Section are intended solely for the benefit of the Lender Parties, and no Credit
Party shall be entitled to rely on any such provision or assert any such
provision in a claim or defense against any LC Participant (other than in
relation to the reference to the Intercreditor Agreement contained in Section
11(f)). The
83
Lender Parties may waive or amend such provisions as they desire without any
notice to or consent of Borrowers or any other Credit Party.
(i) Resignation. The LC Agent may resign at any time by
giving written notice thereof to the LC Participants and the Borrower
Representative. Each such notice shall set forth the date of such resignation.
Upon any such resignation, the Majority LC Participants shall have the right to
appoint a successor LC Agent. A successor must be appointed for any retiring LC
Agent, and such LC Agent's resignation shall become effective when such
successor accepts such appointment. If, within 30 days after the date of the
retiring LC Agent's resignation, no successor LC Agent has been appointed and
has accepted such appointment, then the retiring LC Agent may appoint a
successor LC Agent, which shall be a commercial bank organized or licensed to
conduct a banking or trust business under the Laws of the United States of
America or of any state thereof. Upon the acceptance of any appointment as the
LC Agent hereunder by a successor LC Agent, the retiring LC Agent shall be
discharged from its duties and obligations under this Agreement and the other
Credit Documents. After any retiring LC Agent's resignation hereunder, the
provisions of this Section shall continue to inure to its benefit as to any
actions taken or omitted to be taken by it while it was the LC Agent under the
Credit Documents.
(j) Other Lender Parties. None of the Lender Parties in
such capacities, other than the LC Agent in such capacity, shall have any duties
or responsibilities or incur any liabilities in their respective agency
capacities (as opposed to their respective capacities as LC Participants or LC
Issuer, as applicable) under or in connection with this Agreement or under any
of the other Credit Documents. The relationship between the Borrowers, on the
one hand, and the LC Agent and such other Lender Parties, on the other hand,
shall be solely that of borrower and lender. The LC Agent and the Lender Parties
shall not have any fiduciary responsibilities to the Borrowers or any of their
Affiliates. The LC Agent and the Lender Parties do not undertake any
responsibility to the Borrowers or any of their Affiliates to review or inform
any of the Borrowers of any matter in connection with any phase of any the
Borrowers' or their Affiliate's business or operations.
12. ASSIGNMENTS AND PARTICIPATIONS.
(a) None of the Credit Parties may, without the consent of the LC Agent,
assign or delegate any of its respective rights or obligations under
this Agreement or any other Credit Document. Each LC Participant may,
with the prior written consent of the LC Agent and, provided that no
Default or Event of Default shall have occurred and be continuing, (i)
so long as the sum of the LC Issuer's Percentage Share of the Maximum
Commitment, together with the maximum exposure of SCTSC under the
Purchase Agreements, shall have been reduced to $200,000,000 or less,
the consent of the Borrowers (acting through the Borrower
Representative, which consent shall not be unreasonably withheld or
delayed) and (ii) otherwise, upon consultation with the Borrowers, but
without the consent of any other any Credit Party, assign any or all of
its rights and obligations under this Agreement to any Eligible
Assignee. The assigning LC Participant shall pay to the LC Agent an
administration fee of $3,500 per assignment.
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(b) Upon execution and delivery of any assignment permitted hereunder, from
and after the closing date specified in the assignment, (i) the
assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to
such assignment, have the rights and obligations as an LC Participant
hereunder and (ii) the assignor LC Participant shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant
to such assignment, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an assignment
covering all of such LC Participant's rights and obligations under this
Agreement, such LC Participant shall cease to be a party hereto).
(c) By executing and delivering an assignment, the assignor LC Participant
and the assignee thereunder confirm to and agree with each other and
the other parties hereto as follows: (i) other than as provided in such
assignment, such LC Participant makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or any
other Credit Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or
any other Credit Document or any other instrument or document furnished
pursuant hereto; (ii) such LC Participant makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of any Credit Party or the performance or observance by any
Credit Party of any of its obligations under this Agreement or any
other Credit Document or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a
copy of this Agreement, and such other Credit Documents and other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such assignment; (iv) such
assignee will, independently and without reliance upon such LC
Participant and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement; and (v) such
assignee agrees that it will perform in accordance with their terms all
of the obligations which by the terms of this Agreement are required to
be performed by it as an LC Participant.
(d) Upon its receipt of an assignment executed by an LC Participant and an
assignee, the LC Agent shall give prompt notice thereof to the Borrower
Representative.
(e) The LC Agent shall maintain a copy of each assignment delivered to it
and a register for the recordation of the names and addresses of each
assignee and, with respect to the LC Participants, the principal amount
owing to each LC Participant from time to time (the "REGISTER"). The
entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower Representative and
each LC Participant may treat each person, corporation, partnership,
limited liability company or other entity whose name is recorded in the
Register as an LC Participant hereunder for the purposes of this
Agreement. The Register shall be available for inspection by the
Borrower Representative or any LC Participant at any reasonable time
and from time to time upon reasonable prior notice.
(f) Any LC Participant may sell participations to one or more Assignees in
or to all or a portion of its rights and obligations under this
Agreement; provided, however, that
85
(i) such LC Participant's obligations under this Agreement shall remain
unchanged, (ii) such LC Participant shall remain solely responsible to
the other parties hereto for the performance of such obligations, (iii)
the Borrower Representative shall continue to deal solely and directly
with such LC Participant in connection with such LC Participant's
rights and obligations under this Agreement and (iv) in any proceeding
under any bankruptcy, insolvency or similar proceeding in respect of
any Borrower or any other Credit Party, such LC Participant shall
remain and be, to the fullest extent permitted by law, the sole
representative with respect to the rights and obligations held in the
name of such LC Participant (whether such rights or obligations are for
such LC Participant's own account or for the account of any
participant).
(g) Each LC Participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section, disclose to the assignee or participant or proposed assignee
or participant any information relating to the Credit Parties or their
Affiliates furnished to such LC Participant by or on behalf of the
Credit Parties, provided, that such assignees have agreed to be bound
by the confidentiality provisions in Section 14(q).
13. INDEMNIFICATION.
(a) Subject to Section 13(b), the Credit Parties, on a joint and several
basis, shall indemnify each Lender Party, the Prepetition Agent, the
Prepetition LC Issuer, each Prepetition Lender, the DIP Collateral
Agent, the DIP LC Agent, the DIP LC Issuer and each DIP LC Participant
(each an "INDEMNIFIED PARTY") on demand against any and all
Liabilities, costs and claims which to any extent (in whole or in part)
may be imposed on, incurred by or asserted against any Indemnified
Party growing out of, resulting from or in any other way associated
with:
(i) any LC Issuer's compliance with a completed Letter of
Credit Request that the Borrower Representative provides to any LC
Issuer by facsimile, telecopier or similar means of electronic
transmission and that such LC Issuer believes to be genuine;
(ii) any LC Issuer's issuance of or performance under any
Letter of Credit;
(iii) any cash management arrangements with respect to
agency accounts and lockbox accounts maintained by any of the Borrowers
with any Person; and
(iv) any of the Collateral, the Credit Documents, the
Reorganization Plan, the Prepetition Credit Agreement, the DIP LC
Agreement, the DIP Intercreditor Agreement, or the transactions and
events (including the enforcement or defense thereof) at any time
associated therewith or contemplated therein, whether arising in
contract or in tort or otherwise and including any violation or
noncompliance with any Environmental Laws by any Indemnified Party or
any other Person or any Liabilities or duties of any Indemnified Party
or any other Person with respect to Hazardous Materials found in or
Released into the environment.
(b) The foregoing indemnification shall apply whether or not such
Liabilities, costs and claims are in any way or to any extent owed, in
whole or in part, under any claim or
86
theory of strict liability or caused, in whole or in part, by any
negligent act or omission of any kind by any Indemnified Party;
provided, however, only that Indemnified Party shall not be entitled
under this Section to receive indemnification for that portion, if any,
of any Liabilities, costs and claims proximately caused by its own
individual gross negligence or willful misconduct, as determined in a
final judgment. If any Person (including any Credit Party or any of its
Affiliates) ever alleges such gross negligence or willful misconduct by
any Indemnified Party, the indemnification provided for in this Section
shall nonetheless be paid upon demand, subject to later adjustment or
reimbursement, until such time as a court of competent jurisdiction
enters a final judgment as to the extent and effect of the alleged
gross negligence or willful misconduct. As used in this Section the
term "Indemnified Party" shall refer not only to Indemnified Party but
also to each director, officer, agent, attorney, employee,
representative and affiliate of such Indemnified Party.
(c) The Credit Parties further agree to indemnify on a joint and several
basis each of the LC Agent's Special Counsel, KPMG or such other
advisors and their respective personnel from, and to hold each of the
LC Agent's Special Counsel, KPMG and such advisors and their respective
personnel harmless against, any and all claims, liabilities, costs and
expenses relating to the services rendered by KPMG or such advisors as
special financial advisor to the LC Agent's Special Counsel in
connection with the LC Agent's Special Counsel's representation of the
LC Agent on matters relating to this Agreement and the Credit Documents
and the Cases, except to the extent finally determined to have resulted
from the willful misconduct, gross negligence or fraudulent behavior as
determined in a final non-appealable judgment of the LC Agent's Special
Counsel KPMG or such advisors (as the case may be) relating to such
services. Each of the LC Agent's Special Counsel, KPMG and such
advisors may rely upon the provisions contained in this Section 13(c)
although such Person is not a party to this Agreement.
14. MISCELLANEOUS.
(a) All Exhibits and Schedules attached to or referred to in this Agreement
are a part hereof for all purposes. Reference is hereby made to the
Security Schedule for the meaning of certain terms defined therein and
used but not defined herein, which definitions are incorporated herein
by reference.
(b) Unless the context otherwise requires or unless otherwise provided
herein the terms defined in this Agreement that refer to a particular
agreement, instrument or document also refer to and include all
renewals, extensions, modifications, amendments and restatements of
such agreement, instrument or document; provided, however, that nothing
contained in this Section shall be construed to authorize any such
renewal, extension, modification, amendment or restatement.
(c) All references in this Agreement to Exhibits, Schedules, Articles,
Sections, subsections and other subdivisions refer to the Exhibits,
Schedules, Articles, Sections, subsections and other subdivisions of
this Agreement unless expressly provided otherwise. Titles appearing at
the beginning of any subdivisions are for convenience only and do not
constitute any part of such subdivisions and shall be disregarded in
construing
87
the language contained in such subdivisions. The words "this
Agreement," "this instrument," "herein," "hereof," "hereby,"
"hereunder" and words of similar import refer to this Agreement as a
whole and not to any particular subdivision unless expressly so
limited. The phrases "this Section" and "this subsection" and similar
phrases refer only to the Sections or subsections hereof in which such
phrases occur. The word "or" is not exclusive, and the word "including"
(in its various forms) means "including, without limitation." Pronouns
in masculine, feminine and neuter genders shall be construed to include
any other gender, and words in the singular form shall be construed to
include the plural and vice versa, unless the context otherwise
requires. Except as otherwise specified herein, all references to any
Law shall be deemed references to such Law as the same may be modified,
amended or supplemented from time to time.
(d) All calculations under the Credit Documents of interest and fees shall
be made on the basis of actual days elapsed (including the first day
but excluding the last) and a year of 360 days. Each determination by
Lender Party of amounts to be paid under Section 3 or any other matters
that are to be determined hereunder by Lender Party shall, in the
absence of manifest error, be conclusive and binding. Unless otherwise
expressly provided herein or unless the Majority LC Participants
otherwise consent, all financial statements and reports furnished to
any Lender Party hereunder shall be prepared and all financial
computations and determinations pursuant hereto shall be made in
accordance with GAAP.
(e) Notwithstanding that the Collateral Agent, whether on its own behalf
and/or on behalf of others, may continue to hold the Collateral, and
regardless of the value thereof, each Credit Party shall be and remain
liable for the payment in full, including principal and interest, of
any balance of the Obligations and expenses hereunder at any time
unpaid.
(f) Each Credit Party hereby expressly waives demand, presentment, protest,
notice of protest and notice of dishonor with respect to any and all
instruments and commercial paper included in or evidencing any of the
Obligations or the Collateral, and any and all other demands and
notices of any kind or nature whatsoever with respect to the
Obligations, the Collateral, this Agreement and the other Credit
Documents, except such as are expressly provided for herein or therein.
(g) Under no circumstances shall any Lender Party be deemed to have assumed
any responsibility for or obligation or duty of any nature or kind with
respect to any Collateral, or any matter or proceedings arising out of
or relating thereto, but the same shall be at the sole risk of Credit
Parties at all times. The Credit Parties hereby release each Lender
Party from any claims, causes of action and demands at any time arising
out of, relating to or with respect to this Agreement, the other Credit
Documents, the Obligations, the Collateral and/or any actions taken or
omitted to be taken by any Lender Party with respect thereto, and the
Credit Parties hereby agree jointly and severally to indemnify and hold
each LC Participant harmless from and with respect to any and all such
claims, Liabilities, causes of action and demands by any Person.
(h) Subject to Section 11(f), upon the occurrence and during the
continuance of any Event of Default hereunder, each LC Participant is
hereby authorized at any time and from time to
88
time, to the fullest extent permitted by law, to set-off and apply any
and all deposits (general or special, time or demand, provisional or
final) at any time held and other Indebtedness at any time owing by
such LC Participant to or for the credit or the account of any Credit
Party against any and all of the Obligations which are then liquidated
and matured. Such LC Participant agrees promptly to notify the LC Agent
and the Borrower Representative after any such set-off and application
is made by such LC Participant; provided, however, that the failure to
give such notice shall not affect the validity of such set-off and
application. The rights of the LC Participants under this Section are
in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the LC Participants may
have.
(i) No LC Participant shall be liable to any Credit Party for (i) the
performance of any transaction between any Credit Party or one or more
of its Affiliates and a Beneficiary that underlies a Letter of Credit,
(ii) any act or omission of any Person unless due to the gross
negligence or willful misconduct of such LC Participant, such LC
Participant's own branches or such LC Participant's agents, (iii) loss
or destruction of any draft, demand, or document in transit or in the
possession of others unless due to the gross negligence or willful
misconduct of such LC Participant, such LC Participant's own branches
or such LC Participant's agents, (iv) lack of knowledge of any
particular trade usage (other than standard banking usage as used in
the normal course of business) unless such lack of knowledge is due to
the gross negligence or willful misconduct of such LC Participant, such
LC Participant's own branches or such LC Participant's agents, or (v)
the genuineness, falsification, or effect of any document which appears
on due examination to be regular on its face.
(j) The Credit Parties agree that no LC Participant, its Affiliates or its
correspondents shall be responsible for: (i) the failure of any Letter
of Credit Request to bear any reference to any Letter of Credit, or
inadequate reference in any Letter of Credit Request to the relevant
Letter of Credit, or failure of documents (other than documents
expressly required to be presented under the relevant Letter of Credit)
to accompany any Letter of Credit Request at negotiation, or failure of
any Person to note the amount of any Letter of Credit Request on the
reverse of the relevant Letter of Credit, or to surrender or to take up
any Letter of Credit or to forward documents apart from Letter of
Credit Requests as required by the terms of the relevant Letter of
Credit, each of which provisions, if contained in any Letter of Credit
itself, may be waived by LC Issuer; (ii) errors, omissions,
interruptions or delays in transmissions, or delivery of any messages,
by mail, facsimile, telex, cable, telegraph, wireless or other
teletransmission or by oral instructions, whether or not they may be in
cipher; (iii) the existence, character, quality, quantity, condition,
packing, value or delivery of any property purporting to be represented
by documents; (iv) any difference in character, quality, quantity,
condition, packing, value or delivery of such property from that
expressed in documents; (v) any breach of contract between any Credit
Party and any Beneficiary or any other Person or any dispute as to the
use which may be made of any Letter of Credit or funds obtained
thereunder by any Beneficiary or other party; (vi) the validity,
sufficiency, or genuineness of any Letter of Credit Request or other
document; and (vii) the time, place, manner or order in which shipment
is made.
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(k) No LC Participant shall be responsible for any act, error, neglect or
default, omission, insolvency or failure in business of its
correspondents.
(l) The occurrence of any one or more of the contingencies or events
referred to in the U.C.P. or in the preceding clauses of Sections 11(l)
and (m) shall not affect, impair, or prevent the vesting of any LC
Participant's rights or powers hereunder or the enforceability of any
Obligations.
(m) This Agreement, the Credit Documents and all the transactions
contemplated thereby shall be governed by and construed in accordance
with the laws of the State of New York, without regard to choice of law
principles (other than New York General Obligations Law Section
5-1401).
(n) Each Credit Party hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the courts
of New York State or federal court of the United States of America
sitting in New York City, whether trial or appellate, in any action or
proceeding arising out of, or relating to, this Agreement, or for
recognition or enforcement of any judgment in respect thereof, and each
Credit Party hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted
by law, in such federal court and consents that any such action or
proceeding may be brought in such courts and waives to the fullest
extent permitted by law any objection or claim that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same. Each
Credit Party hereby agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided
by law. Nothing in this Agreement shall affect any right that any party
may otherwise have to bring any action or proceeding relating to this
Agreement in the courts of any jurisdiction. EACH CREDIT PARTY HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF, OR RELATING TO, THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT OR THE ACTIONS OF ANY LENDER PARTY IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
(o) The U.C.P. shall be binding upon the Borrowers and each LC Issuer with
respect to each Letter of Credit issued by the LC Issuer except to the
extent otherwise expressly agreed, if any.
(p) The LC Agent and each LC Issuer may rely on the written notices,
requests, waivers and consents of the Borrower Representative, its
officers and designated agents, including, without limitation, any
Letter of Credit Requests, as the binding actions of the Borrowers
hereunder. Any such notices, requests, waivers or consents received by
the LC Agent and each LC Issuer from the Borrower Representative on
behalf of the Borrowers hereunder shall be deemed to have been sent by
the Borrowers, and all notices and other information furnished by the
LC Agent or any LC Issuer to the Borrower Representative
90
hereunder will be received by the Borrower Representative on behalf of
the Borrowers. In addition, the LC Agent and each LC Issuer may receive
from the Borrower Representative, on behalf of the Borrowers, all
amounts required to be paid by the Borrowers and may pay to the
Borrower Representative for the Borrowers' account, all amounts
required to be paid by or on behalf of any LC Participant to the
Borrowers; provided, however, that neither the LC Agent nor any LC
Issuer shall have any responsibility to inquire as to the application
of such amounts by the Borrower Representative and is hereby released
from any liability to the Borrowers or any other Credit Party arising
from such application by the Borrower Representative.
(q) Each Lender Party agrees (on behalf of itself and each of its
Affiliates, and each of its and their directors, officers, agents,
attorneys, employees and representatives) that it (and each of them)
will take all reasonable steps to keep confidential any non-public
information supplied to it by or at the direction of any Credit Party;
provided, however, that this restriction shall not apply to information
which (i) has at the time in question entered the public domain, (ii)
is required to be disclosed by Law (whether valid or invalid) of any
Tribunal, (iii) is disclosed to any of its Affiliates, auditors,
attorneys or agents, (iv) is furnished to any other Lender Party or to
any assignee or prospective assignee of, or purchaser or prospective
purchaser of participations or other interests in, any interest under
the Credit Documents (provided each such assignee or prospective
assignee or purchaser or prospective purchaser first agrees to hold
such information in confidence on the terms provided in this Section),
or (v) is disclosed in the course of enforcing its rights and remedies
following the occurrence of an Event of Default.
(r) Waivers and Amendments; Acknowledgments
(i) No failure or delay (whether by course of conduct or
otherwise) by any Lender Party in exercising any right, power or remedy
which such Lender Party may have under any of the Credit Documents
shall operate as a waiver thereof or of any other right, power or
remedy, nor shall any single or partial exercise by any Lender Party of
any such right, power or remedy preclude any other or further exercise
thereof or of any other right, power or remedy. No waiver of any
provision of any Credit Document and no consent to any departure
therefrom shall ever be effective unless it is in writing and signed as
provided below in this Section, and then such waiver or consent shall
be effective only in the specific instances and for the purposes for
which given and to the extent specified in such writing. No notice to
or demand on any Credit Party shall in any case of itself entitle any
Credit Party to any other or further notice or demand in similar or
other circumstances. This Agreement and the other Credit Documents set
forth the entire understanding among the parties hereto with respect to
the transactions contemplated herein and therein and supersede all
prior discussions and understandings with respect to the subject matter
hereof and thereof, and no waiver, consent, release, modification or
amendment of or supplement to this Agreement or the other Credit
Documents shall be valid or effective against any party hereto unless
the same is in writing and signed by (A) if such party is a Credit
Party, by such party, (B) if such party is the LC Agent or an LC
Issuer, by such party and (C) if such party is an LC Participant, by
such LC Participant or by the LC Agent with the consent of the Majority
LC Participants. Notwithstanding the foregoing or anything to the
contrary herein, the LC
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Agent shall not, without the prior consent of each individual Lender
Party, execute and deliver on behalf of such Lender Party any waiver or
amendment that would: (A) increase the Percentage Share of any LC
Participant or the maximum amount any such LC Participant is committed
to fund in respect of LC Obligations or subject such LC Participant to
any additional obligations, (B) reduce any fees payable to such LC
Participant hereunder, (C) change any date fixed for any payment of any
such fees, (D) amend the definition herein of "Borrowing Base" or any
of the terms used in that definition (other than changes to the
"Advance Rates" and the requirements for eligibility as provided in
such definition), (E) amend the definition herein of "Majority LC
Participants" or otherwise change the aggregate amount of Percentage
Shares required for the LC Agent, the LC Participants or any of them to
take any particular action under the Credit Documents, (F) release any
Borrower from its requirement to pay the Obligations or any Guarantor
from its guaranty of such payment, or (G) except as otherwise expressly
provided for in Section 7(f), release any Collateral.
(ii) Each Borrower hereby represents, warrants,
acknowledges and admits that (A) it has been advised by counsel in the
negotiation, execution and delivery of the Credit Documents to which it
is a party, (B) it has made an independent decision to enter into this
Agreement and the other Credit Documents to which it is a party,
without reliance on any representation, warranty, covenant or
undertaking by the LC Agent or any Lender Party (C) there are no
representations, warranties, covenants, undertakings or agreements by
any Lender Party as to the Credit Documents other than as set forth in
the Credit Documents, (D) no Lender Party has any fiduciary obligation
toward any Credit Party with respect to any Credit Document or the
transactions contemplated thereby, (E) the relationship pursuant to the
Credit Documents between Borrowers and the other Credit Parties, on one
hand, and each Lender Party, on the other hand, is and shall be solely
that of debtor and creditor, respectively, (F) no partnership or joint
venture exists with respect to the Credit Documents between any Credit
Party and any Lender Party, (G) the LC Agent is not Borrowers' agent,
but the LC Agent for LC Participants, (H) should an Event of Default or
Default occur or exist, each Lender Party will determine in its sole
discretion and for its own reasons what remedies and actions it will or
will not exercise or take at that time, (I) without limiting any of the
foregoing, the Borrowers are not relying upon any representation or
covenant by any Lender Party, or any representative thereof, and no
such representation or covenant has been made, that any Lender Party
will, at the time of an Event of Default or Default, or at any other
time, waive, negotiate, discuss or take or refrain from taking any
action permitted under the Credit Documents with respect to any such
Event of Default or Default or any other provision of the Credit
Documents and (J) all Lender Parties have relied upon the truthfulness
of the acknowledgments in this Section in deciding to execute and
deliver this Agreement and to become obligated hereunder.
(s) The Lender Parties, the Credit Parties and each other party to the
Credit Documents intend to contract in strict compliance with
applicable usury Law from time to time in effect. In furtherance
thereof such Persons stipulate and agree that none of the terms and
provisions contained in the Credit Documents shall ever be construed to
create a contract to pay, for the use, forbearance or detention of
money, interest in excess of the maximum amount of interest permitted
to be contracted for, charged or received by applicable Law
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from time to time in effect. Neither any Credit Party nor any present
or future guarantors, endorsers or other Persons hereafter becoming
liable for payment of any Obligation shall ever be liable for unearned
interest thereon or shall ever be required to pay interest thereon in
excess of the maximum amount that may be lawfully contracted for,
charged or received under applicable Law from time to time in effect,
and the provisions of this Section shall control over all other
provisions of the Credit Documents that may be in conflict or apparent
conflict herewith. The Lender Parties expressly disavow any intention
to contract for, charge or receive excessive unearned interest or
finance charges in the event the maturity of any Obligation is
accelerated. If (i) the maturity of any Obligation is accelerated for
any reason, (ii) any Obligation is prepaid and as a result any amounts
held to constitute interest are determined to be in excess of the legal
maximum or (iii) any LC Participant or any other holder of any or all
of the Obligations shall otherwise collect moneys that are determined
to constitute interest which would otherwise increase the interest on
any or all of the Obligations to an amount in excess of that permitted
to be contracted for, charged or received by applicable Law then in
effect, then all sums determined to constitute interest in excess of
such legal limit shall, without penalty, be promptly applied to reduce
the then outstanding principal of the related Obligations or, at such
LC Participant's or holder's option, promptly returned to Borrower or
other payor thereof upon such determination. In determining whether or
not the interest paid or payable, under any specific circumstance,
exceeds the maximum amount permitted under applicable Law, the Lender
Parties and the Credit Parties (and any other payors thereof) shall to
the greatest extent permitted under applicable Law, (i) characterize
any non- principal payment as an expense, fee or premium rather than as
interest, (ii) exclude voluntary prepayments and the effects thereof
and (iii) amortize, prorate, allocate and spread the total amount of
interest throughout the entire contemplated term of the instruments
evidencing the Obligations in accordance with the amounts outstanding
from time to time thereunder and the maximum legal rate of interest
from time to time in effect under applicable Law in order to lawfully
charge the maximum amount of interest permitted under applicable Law.
In the event applicable Law provides for an interest ceiling under
Chapter 303 of the Texas Finance Code (the "TEXAS FINANCE CODE") as
amended, to the extent that the Texas Finance Code is mandatorily
applicable to any LC Participant, for that day, the ceiling shall be
the "weekly ceiling" as defined in the Texas Finance Code; provided,
however, that if any applicable Law permits greater interest, the Law
permitting the greatest interest shall apply. In no event shall Chapter
346 of the Texas Finance Code apply to this Agreement, any other Credit
Document or any transactions or loan arrangement provided or
contemplated hereby or thereby.
(t) The Credit Parties and the Lender Parties mutually hereby knowingly,
voluntarily and intentionally waive the right to a trial by jury in
respect of any claim based hereon, arising out of, under or in
connection with this Agreement or any other Credit Documents
contemplated to be executed in connection herewith or any course of
conduct, course of dealings, statements (whether oral or written) or
actions of any party. This waiver constitutes a material inducement for
the Lender Parties to enter into this Agreement and the other Credit
Documents and to make Extensions of Credit. Each Credit Party and each
Lender Party hereby further (i) irrevocably waives, to the maximum
extent not prohibited by law, any right it may have to claim or recover
in any such litigation any
93
Special Damages, as defined below, (ii) certifies that no party hereto
nor any representative or agent or counsel for any party hereto has
represented, expressly or otherwise, or implied that such party would
not, in the event of litigation, seek to enforce the foregoing waivers
and (iii) acknowledges that it has been induced to enter into this
Agreement, the other Credit Documents and the transactions contemplated
hereby and thereby by, among other things, the mutual waivers and
certifications contained in this Section. "SPECIAL DAMAGES" includes
all special, consequential, exemplary or punitive damages (regardless
of how named), but does not include any payments of funds that any
party hereto has expressly promised to pay or deliver to any other
party hereto.
(u) All of the Credit Parties' various representations, warranties,
covenants and agreements in the Credit Documents shall survive the
execution and delivery of this Agreement and the other Credit Documents
and the performance hereof and thereof, including the delivery of the
Credit Documents and shall further survive until all of the Obligations
are paid in full in cash to each Lender Party and all of the Lender
Parties' obligations to Borrower are terminated. All statements and
agreements contained in any certificate or other instrument delivered
by any Credit Party to any Lender Party under any Credit Document shall
be deemed representations and warranties by Borrower or agreements and
covenants of Borrower under this Agreement. The representations,
warranties, indemnities and covenants made by the Credit Parties in the
Credit Documents, and the rights, powers and privileges granted to the
Lender Parties in the Credit Documents, are cumulative and, except for
expressly specified waivers and consents, no Credit Document shall be
construed in the context of another to diminish, nullify or otherwise
reduce the benefit to any Lender Party of any such representation,
warranty, indemnity, covenant, right, power or privilege. In particular
and without limitation, no exception set out in this Agreement to any
representation, warranty, indemnity or covenant herein contained shall
apply to any similar representation, warranty, indemnity or covenant
contained in any other Credit Document, and each such similar
representation, warranty, indemnity or covenant shall be subject only
to those exceptions that are expressly made applicable to it by the
terms of the various Credit Documents.
(v) Intercreditor Agreement. Each of the LC Issuer, LC Participants, the LC
Agent and the Collateral Agent acknowledges and agrees that the rights
and obligations of such parties under this Agreement are subject in all
respects to the Intercreditor Agreement.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this Letter of
Credit Agreement as of the day and year first above written.
EOTT ENERGY OPERATING LIMITED
PARTNERSHIP,
as a Borrower and as the Borrower Representative
By: EOTT ENERGY GENERAL PARTNER,
L.L.C., its General Partner
By:___________________________________
Name: H. Xxxxx Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
EOTT ENERGY CANADA LIMITED
PARTNERSHIP, as a Borrower
By: EOTT ENERGY GENERAL PARTNER,
L.L.C., its General Partner
By:_____________________________________
Name: H. Xxxxx Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
EOTT ENERGY LIQUIDS, L.P.,
as a Borrower
By: EOTT ENERGY GENERAL PARTNER,
L.L.C., its General Partner
By:______________________________________
Name: H. Xxxxx Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
EOTT ENERGY PIPELINE LIMITED
PARTNERSHIP, as a Borrower
By: EOTT ENERGY GENERAL PARTNER,
L.L.C., its General Partner
By:______________________________________
Name: H. Xxxxx Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
EOTT ENERGY LLC,
as a Guarantor
By:___________________________________
Name: H. Xxxxx Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
EOTT ENERGY GENERAL PARTNER, L.L.C.,
as a Guarantor
By:____________________________________
Name: H. Xxxxx Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
Address for each Credit Party:
Attention: Vice President & General Counsel
By courier: 0000 X. Xxx Xxxxxxx Xxxxxxx
X., Xxxxx 000
Xxxxxxx, Xxxxx 00000
By mail: X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Phone: 000-000-0000
Fax: 000-000-0000
STANDARD CHARTERED BANK,
as LC Agent, LC Issuer, an LC Participant and as
Collateral Agent
By:____________________________________
Name: Xxxx XxXxxxxx
Title: Senior Vice President
Address:
Special Assets Management
Xxx Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
SCHEDULE I
LC PARTICIPANT SCHEDULE
LC PARTICIPANT PERCENTAGE SHARE
Standard Chartered Bank 100%
EXHIBIT A
LETTER OF CREDIT REQUEST
EOTT ENERGY OPERATING LIMITED PARTNERSHIP
X.X. XXX 0000
XXXXXXX, XXXXX 00000-0000
Date: [_________________]
To: [_________________]
Standard Chartered Bank
Fax No.: 000-000-0000
000-000-0000
From: [_________________]
Phone: 713/000-0000
Fax: 713/000-0000
Subject: Letter of Credit Request
Please [issue] [amend] [extend the expiration date of] the irrevocable standby
Letter[s] of Credit identified in Schedule I hereto.
To induce the LC Participants to issue, amend or extend the expiration
date of, such Letter[s] of Credit, the Borrowers hereby represent, warrant,
acknowledge and agree to and with the LC Issuer, the LC Agent and each LC
Participant that:
1. The manager or officer of EOTT General Partner, L.L.C. ("EOTT GP")
signing this instrument is the duly elected, qualified and acting
manager or officer of EOTT GP as indicated below such manager's or
officer's signature hereto, having all necessary authority to act for
EOTT GP in its capacity as the sole General Partner of the Borrower
Representative in making the request on behalf of the Borrowers herein
contained.
2. The representations and warranties of the Guarantors and the Borrowers
set forth in the Letter of Credit Agreement, dated as of February 11,
2003 (as from time to time amended, the "CREDIT AGREEMENT"), among EOTT
Energy Operating Limited Partnership ("EOTT OLP"), EOTT Energy Canada
Limited Partnership ("EOTT CANADA"), EOTT Energy Liquids, L.P. ("EOTT
LIQUIDS"), EOTT Energy Pipeline Limited Partnership ("EOTT PIPELINE"
and together with EOTT OLP, EOTT Canada and EOTT Liquids, on a joint
and several basis, the "BORROWERS"), EOTT ENERGY LLC, ("EOTT LLC"), and
EOTT GP (together with EOTT LLC, the "GUARANTORS", and together with
the Borrowers, collectively, the "CREDIT PARTIES"), Standard Chartered
Bank, as LC Agent and the other signatories thereto, and the other
Credit Documents are true and correct on and as of the date hereof
(except for changes resulting from the transactions contemplated in the
Credit Agreement and the other Credit Documents, or to the extent that
such representation or warranty was made as of a specific date), with
the same effect as though such representations and warranties had been
made on and as of the date hereof.
3. On the date hereof, (a) there does not exist any condition or event
that constitutes a Default or an Event of Default, and no Default or
Event or Default will exist upon the Borrowers' receipt and application
of the Extension of Credit requested hereby, and (b) no Ten-Day Waiting
Period shall be continuing. The Borrowers will use the Letter[s] of
Credit hereby requested in compliance with Section 2(a)(ii)(4) of the
Credit Agreement.
4. Each Credit Party has performed and complied with all agreements and
conditions in the Credit Agreement and the other Credit Documents
required to be performed or complied with by such Credit Party on or
prior to the date hereof, and each of the conditions precedent to
Extensions of Credit contained in the Credit Agreement have been
satisfied.
5. After taking the issuance, the amendment, or the extension of the
expiration date of, such Letter[s] of Credit into account, the
aggregate LC Obligations do not exceed the lesser of (A) the Maximum
Commitment and (B) the Borrowing Base, in each case on the date
requested for the Extension of Credit.
6. The Credit Documents have not been modified, amended or supplemented by
any unwritten representations or promises, by any course of dealing or
by any other means not provided for in the Credit Agreement. The
Agreement and the other Credit Documents are hereby ratified, approved
and confirmed in all respects.
Capitalized terms used and not defined herein have the meanings given
to them in the Credit Agreement.
The manager or officer of EOTT GP signing this instrument hereby
certifies that, to the best of his or her knowledge after due inquiry, the above
representations, warranties, acknowledgments and agreements of the Borrowers are
true, correct and complete in all material respects.
EOTT ENERGY OPERATING LIMITED PARTNERSHIP
By: EOTT ENERGY GENERAL PARTNER, L.L.C.
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
SCHEDULE I
LIST OF LETTERS OF CREDIT(1)
1. Date of Issuance: [_________________]
Applicant: [_________________]
Beneficiary: [_________________]
Address: [_________________]
Phone: [_________________]
Fax: [_________________]
Dollar Value: $[_________________] USD Maximum
Expiration Date: [_________________]
Conditions for Drawing(s): [Insert Conditions for Drawing(s)]
Special Conditions: [Insert Special Conditions]
Special Instructions: [Insert Special Instructions]
-----------------
(1) Insert additional details for each additional Letter of
Credit.
EXHIBIT B
CERTIFICATE ACCOMPANYING
FINANCIAL STATEMENTS
Reference is made to the Letter of Credit Agreement, dated as of
February 11, 2003 (as from time to time amended, the "CREDIT AGREEMENT"), among
EOTT Energy Operating Limited Partnership ("EOTT OLP"), EOTT Energy Canada
Limited Partnership ("EOTT CANADA"), EOTT Energy Liquids, L.P. ("EOTT LIQUIDS"),
EOTT Energy Pipeline Limited Partnership ("EOTT PIPELINE" and together with EOTT
OLP, EOTT Canada and EOTT Liquids, on a joint and several basis, the
"BORROWERS"), EOTT ENERGY LLC, ("EOTT LLC"), and EOTT ENERGY GENERAL PARTNER,
L.L.C. ("EOTT GP", together with EOTT LLC, the "GUARANTORS", and together with
the Borrowers, collectively, the "CREDIT PARTIES"), Standard Chartered Bank, as
LC Agent and the other signatories thereto. Capitalized terms used and not
defined herein have the meanings given to them in the Credit Agreement.
This Certificate is furnished pursuant to Section 6(d)(iv) of the
Credit Agreement. Together herewith, EOTT LLC is furnishing to the LC Agent and
each LC Participant, EOTT LLC's [audited/unaudited] [yearly][quarterly][monthly]
consolidated financial statements (the "FINANCIAL STATEMENTS") and supporting
consolidating financial statements, if required, as of _____________, 200__ (the
"REPORTING DATE"). EOTT LLC hereby certifies, represents, warrants and
acknowledges to the LC Agent and each LC Participant that:
(a) the officer of EOTT LLC signing this instrument is a
duly elected, acting and qualified officer of EOTT LLC as indicated
below such officer's signature hereto having all necessary authority to
act for EOTT LLC in making the certifications, representations,
warranties and acknowledgements set forth herein;
(b) the Financial Statements are accurate and complete in
all material respects (subject, in the case of such unaudited financial
statements, to changes resulting from normal and recurring adjustments
made in conformity with GAAP) and satisfy the requirements of the
Credit Agreement;
(c) on the Reporting Date, each Credit Party was, and on
the date hereof is, in full compliance with the disclosure requirements
of Section 6(f) of the Credit Agreement, and no Default otherwise
existed on the Reporting Date or otherwise exists on the date hereof;
(d) the representations and warranties of EOTT LLC and
the Borrowers set forth in the Credit Agreement and the other Credit
Documents are true and correct on and as of the date hereof (except for
changes resulting from the transactions contemplated in the Credit
Agreement and the other Credit Documents, or to the extent that such
representation or warranty was made as of a specific date), with the
same effect as though such representations and warranties had been made
on and as of the date hereof; and
(e) as of the date hereof:
(i) the Consolidated EBIDA for the Reference
Period ending on ________, 200_ was $_________, as computed on
Attachment 1 hereto. The minimum amount of Consolidated EBIDA
for such period permitted pursuant to clause (p) of Section 7
of the Credit Agreement is $________;
(ii) the Consolidated Tangible Net Worth as of
________, 200_ is $________, as computed on Attachment 2
hereto. The minimum aggregate amount of Consolidated Tangible
Net Worth as of such date permitted pursuant to clause (q) of
Section 7 of the Credit Agreement is $________;
(iii) the Interest Coverage Ratio for the
Reference Period ending on ________, 200_ was ___ to 1.00, as
computed on Attachment 3 hereto. The minimum Interest Coverage
Ratio for such period permitted pursuant to clause (r) of
Section 7 of the Credit Agreement is __ to 1.00; and
(iv) the Current Ratio as of ________, 200_ is
___ to 1.00, as computed on Attachment 4 hereto. The minimum
Current Ratio for such date permitted pursuant to clause (s)
of Section 7 of the Credit Agreement is ___ to 1.00.
The officer of EOTT LLC signing this instrument hereby certifies that
he/she has reviewed the Credit Documents, the Financial Statements and the
supporting consolidating financial statements and has otherwise undertaken such
inquiry as is in his/her opinion necessary to enable him/her to express an
informed opinion with respect to the above certifications, representations,
warranties and acknowledgments made by EOTT LLC and, to the best of his/her
knowledge, such certifications, representations, warranties and acknowledgments
are true, correct and complete in all material respects.
IN WITNESS WHEREOF, this instrument is executed as of __________,
200___.
EOTT ENERGY LLC
By:
----------------------------------------
Name:
-----------------------------------
Title: [Chief Financial Officer]
[Treasurer]
2
Attachment 1
CONSOLIDATED EBIDA
As of _______, 200_ (the "Computation Date")
for the Reference Period ending
_______, 200_ (the "Computation Period")
A. Consolidated Net Income (Loss):
(1) EOTT LLC's Consolidated gross revenues for the
Computation Period, including any cash dividends or
distributions actually received from any other Person
during such period.......................................................... $__________
(2) EOTT LLC's Consolidated expenses and other proper
charges against income (including taxes on income to
the extent imposed), determined on a Consolidated
basis after eliminating earnings or losses
attributable to outstanding minority interests and
excluding the net earnings of any Person other than a
Subsidiary in which EOTT LLC or any of its
Subsidiaries has an ownership interest...................................... $__________
(3) Consolidated Net Income (Loss):
Item A(1) minus Item A(2)................................................... $__________
B. All interest expense that was deducted in determining such Consolidated
Net Income (Loss)............................................................................. $__________
C. Depreciation and amortization (including amortization of good will and
debt issue costs) and other non-cash charges (excluding any non-cash
charge to the extent it represents an accrual of, or reserve for, cash
disbursement for any of the next succeeding four Fiscal Quarters)............................. $__________
D. All non-cash items of income that were included in determining such
Consolidated Net Income (Loss) (excluding any non-cash item to the
extent it represents an accrual for cash receipt in any of the next
succeeding four Fiscal Quarters).............................................................. $__________
E. All of the foregoing items directly attributable to the Designated
Assets during the first three months following the Closing Date............................... $__________
F. Permitted Adjustments......................................................................... $__________
G. Consolidated EBIDA for the Computation Period:
Sum of Item A(3), Item B and Item C minus Items D, E and F.................................... $__________
Attachment 2
CONSOLIDATED TANGIBLE NET WORTH
As of _______, 200_ (the "Computation Date")
A. The Consolidated members' capital of EOTT LLC and its Subsidiaries............................ $__________
B. The principal amount of any payment-in-kind notes issued in lieu of
cash payment of interest on the New Senior Notes.............................................. $__________
C. Intangible Assets (to the extent included in determining such
Consolidated members' capital):
(1) All write-ups subsequent to December 31, 2002 in the
book value of any non-current asset owned by EOTT LLC
or any Subsidiary........................................................... $__________
(2) All investments in Persons that are not Subsidiaries,
except to the extent included in Cash Equivalents........................... $__________
(3) All unamortized debt discount and expense (other than
fees and expenses related to any Funded Debt),
unamortized deferred charges, goodwill, Intellectual
Property, organizational or research and
developmental expenses and other intangible items
(other than with respect to any Designated Asset)........................... $__________
(4) Sum of Items C(1) to C(3)................................................... $__________
D. Any Consolidated members' capital of EOTT LLC and its Subsidiaries to
the extent directly attributable to the Designated Assets during the
first three months following the Closing...................................................... $__________
E. Permitted Adjustments......................................................................... $__________
F. Consolidated Tangible Net Worth as of the Computation Date:
Sum of Items A and B minus Items C(4), D and E................................................ $__________
Attachment 3
INTEREST COVERAGE RATIO
As of _______, 200_ (the "Computation Date")
for the Reference Period ending
__________, 200_ (the "Computation Period")
A. Consolidated EBIDA for the Computation Period:
The amount set forth in Item E of Attachment 1 to this Exhibit B.............................. $__________
B. Consolidated Total Interest Expense for the Computation Period:
(1) The aggregate amount of interest required to be paid
or accrued by EOTT LLC or its Subsidiaries during the
Computation Period on all Indebtedness of EOTT LLC
and its Subsidiaries outstanding during all or any
part of such period, whether such interest was or is
required to be reflected as an item of expense or
capitalized, including payments consisting of
interest in respect of any Capital Lease or any
Synthetic Lease, and including commitment fees,
agency fees, facility fees, balance deficiency fees
and similar fees or expenses in connection with the
borrowing of money........................................................... $__________
(2) The Reduction Fee payable pursuant to Section
2(j)(ix) of the Credit Agreement, to the extent
included in Item B(1)------------------------------......................... $__________
(3) Any such interest, fees or expenses to the extent
directly attributable to the Designated Assets during
the first three months following the Closing Date........................... $__________
(4) Permitted Adjustments....................................................... $__________
(5) The principal amount of any payment-in-kind notes
issued in lieu of cash payment of interest on the New
Senior Notes................................................................ $__________
(6) Consolidated Total Interest Expense for the
Computation Period: Item B(1) minus Items B(2), (3),
(4) and (5).................................................................. $__________
C. Interest Coverage Ratio for the Computation Period:
The ratio of Item A to Item B(6).............................................................. ____ to 1.0
Attachment 4
CURRENT RATIO
As of _______, 200_ (the "Computation Date")
A. Consolidated Current Assets:
(1) All assets of the Borrowers and their Subsidiaries on
a Consolidated basis that, in accordance with GAAP,
are properly classified as current assets, including
(without duplication) all crude oil, refined
petroleum products or natural gas liquids in pipeline
or storage assets owned by a Borrower at the time of
determination, valued in accordance with GAAP............................... $__________
(2) All the fixed assets of the Designated Assets during
the first three months following the Closing Date........................... $__________
(3) Permitted Adjustments....................................................... $__________
(4) Item A(1) minus Items A(2) and (3).......................................... $__________
B. Consolidated Current Liabilities:
(1) All Liabilities and other Indebtedness of the
Borrowers and their Subsidiaries on a Consolidated
basis that, in accordance with GAAP, are properly
classified as current liabilities........................................... $__________
(2) Funded Debt................................................................. $__________
(3) All Liabilities and Indebtedness directly
attributable to the Designated Assets during the
first three months following the Closing Date............................... $__________
(4) Permitted Adjustments....................................................... $__________
(5) Item B(1) minus Items B(2), (3) and (4)..................................... $__________
C. Current Ratio as of the Computation Date:
The ratio of Item A(4) to Item B(5)........................................................... ____ to 1.0
EXHIBIT C
[LETTERHEAD OF BORROWER]
BORROWING BASE REPORT
as of ___/___/___
I. COLLATERAL TYPE MARKET ADVANCE BORROWING
VALUE RATE(1) BASE
1. Eligible Cash Equivalents _________ 100% ____________
2. Eligible Accounts Receivables
a. Tier I Eligible Receivables _________ 90% ____________
b. Tier II Eligible Receivables _________ 85% ____________
3. Eligible Crude/Product/Liquid Deliveries
a. Tier I Eligible Crude/Product/Liquid Deliveries _________ 90% ____________
b. Tier II Eligible Crude/Product/Liquid Deliveries _________ 85% ____________
4. Appraised Value of Eligible Fixed Assets _________ 80% ____________
5. Inventory
a. (i) NYMEX Hedged Eligible Inventory _________ 90% ____________
(ii) Other Hedged Eligible Inventory _________ 80% ____________
b. Market Value of Unhedged Eligible Inventory _________ 80% ____________
6. Eligible Margin Deposits _________ 80% ____________
7. Undrawn Product Purchase Letters of Credit _________ 80% ____________
8. Does a Borrower own the MTBE Assets? [Y][N] NA NA [$65,000,000][0]
MINUS:
9. First Purchaser Crude Payables _________ 100% ____________
10. Other Priority Claims _________ 100% ____________
11. The aggregate net amounts payable by each Borrower under all
Hedging Contracts to which it is a party: _________ 110% ____________
12. The amount of any setoff or contra account to any Eligible
Receivable that could arise from an obligation of any Borrower to sell
or purchase crude oil in any future month to the extent not otherwise
reflected as a reduction of Eligible Receivables, such amount to be
determined on an early termination or xxxx to market basis _________ 100% ____________
COLLATERAL TOTAL: _______
II. OUTSTANDINGS
1. Principal amount of loans outstanding and any accrued and
unpaid fees and expenses under Xxxxxx DIP Credit Agreement: _______
2. Outstanding amounts under the Purchase Agreements, including
all accrued and unpaid fees and expenses thereunder: _______
TOTAL OUTSTANDINGS _______
III. EXCESS / DEFICIT (I-II) _______
-----------------
(1) Subject to adjustment per the definition of "Borrowing Base" in the
Letter of Credit Agreement, dated as of February 11, 2003 (as from time
to time amended, the "CREDIT AGREEMENT"), among EOTT Energy Operating
Limited Partnership ("EOTT OLP"), EOTT Energy Canada Limited
Partnership ("EOTT CANADA"), EOTT Energy Liquids, L.P. ("EOTT
LIQUIDS"), EOTT Energy Pipeline Limited Partnership ("EOTT PIPELINE"
and together with EOTT OLP, EOTT Canada and EOTT Liquids, on a joint
and several basis, the "BORROWERS"), EOTT ENERGY LLC, ("EOTT LLC"), and
EOTT Energy General Partner, L.L.C. ("EOTT GP", together with EOTT LLC,
the "GUARANTORS", and together with the Borrowers, collectively, the
"CREDIT PARTIES"), Standard Chartered Bank, as LC Agent and the other
signatories thereto.
I hereby certify that the information provided herein is true and correct to the
best of my knowledge and that the Borrowers have been in compliance with all
terms and conditions of all Credit Documents at all times.
BY:
-------------------------------------
TITLE: (CEO, CFO or Treasurer)
----------------------------------
EXHIBIT D
Beg Bal Beg Bal Beg Bal Beg Bal Beg Bal Beg Bal Beg Bal Beg Bal
0.00 0.00 0.00 0.00 0.00 0.00 0.00
Actual Actual Actual Actual Actual Actual Actual Actual
[DATE] [DATE] [DATE] [DATE] [DATE] [DATE] [DATE] [DATE]
------- ------- ------- ------- ------- ------- ------- -------
OPERATING RECEIPTS
Crude Receipts
Crude Disbursements
Crude/Product/NGL Payables
Royalty Checks
Canada Receipts/Disbursements
Pipeline Receipts
Pipeline Disbursements
Pipeline Lockbox
NGL & Product-Receipts
NGL & Product-Disbursements
NGL & Product-Lockbox
MTBE Receipts
MTBE Disbursements (Working Cap)
Storage & Grid Receipts
Tax Disbursements
Merc
Other Miscellaneous Incoming
------ ------ ------ ------ ------ ------ ------ ------
Operating Receipts
OPERATING DISBURSEMENTS
Payroll
Payroll Wires (Benefits)
ETS Monthly Operating
OLP Monthly Operating
Pipeline Monthly Operating
MTBE/G&S Monthly Operating
Field Account
Other A/P
------ ------ ------ ------ ------ ------ ------ ------
Operating Disbursements
CASHFLOW - OPERATIONS
------ ------ ------ ------ ------ ------ ------ ------
CAPITAL & NON-OPERATING:
Miss #3 Pipeline
Professional Fee/Origination Fee
Interest/LC Cost - s/t
ETS Payable
Loan Advances/Payments
Unitholder/Senior Debt/New Debt
------- ------ ------ ------ ------ ------ ------ ------
Capital & Non-Operating
Net Cash Flows
------- ------ ------ ------ ------ ------ ------ ------
LOAN BALANCE - ALL LOANS
======= ====== ====== ====== ====== ====== ====== ======
CHANGE IN BOOK CASH
Beginning Cash
Net Cash Flow
Difference due to Currency Exchange Rate
Ending Cash
------- ------ ------ ------ ------ ------ ------ ------
Daily Conversion Rate
======= ====== ====== ====== ====== ====== ====== ======
FX Buys (Sells) CAD $
FX Buys (Sells) USD $
FX Rate
Outstanding Check Total
Beg Bal Beg Bal Beg Bal Beg Bal Beg Bal
0.00 0.00 0.00 0.00 0.00
Actual Actual Actual Actual Actual
[DATE] [DATE] [DATE] [DATE] [DATE]
------- ------- ------- ------- -------
OPERATING RECEIPTS
Crude Receipts
Crude Disbursements
Crude/Product/NGL Payables
Royalty Checks
Canada Receipts/Disbursements
Pipeline Receipts
Pipeline Disbursements
Pipeline Lockbox
NGL & Product-Receipts
NGL & Product-Disbursements
NGL & Product-Lockbox
MTBE Receipts
MTBE Disbursements (Working Cap)
Storage & Grid Receipts
Tax Disbursements
Merc
Other Miscellaneous Incoming
------ ------ ------ ------ ------
Operating Receipts
OPERATING DISBURSEMENTS
Payroll
Payroll Wires (Benefits)
ETS Monthly Operating
OLP Monthly Operating
Pipeline Monthly Operating
MTBE/G&S Monthly Operating
Field Account
Other A/P
------ ------ ------ ------ ------
Operating Disbursements
CASHFLOW - OPERATIONS
------ ------ ------ ------ ------
CAPITAL & NON-OPERATING:
Miss #3 Pipeline
Professional Fee/Origination Fee
Interest/LC Cost - s/t
ETS Payable
Loan Advances/Payments
Unitholder/Senior Debt/New Debt
------ ------ ------ ------ ------
Capital & Non-Operating
Net Cash Flows
------ ------ ------ ------ ------
LOAN BALANCE - ALL LOANS
====== ====== ====== ====== ======
CHANGE IN BOOK CASH
Beginning Cash
Net Cash Flow
Difference due to Currency Exchange Rate
Ending Cash
------ ------ ------ ------ ------
Daily Conversion Rate
====== ====== ====== ====== ======
FX Buys (Sells) CAD $
FX Buys (Sells) USD $
FX Rate
Outstanding Check Total
Beg Bal Beg Bal Beg Bal Beg Bal Beg Bal Beg Bal Beg Bal Beg Bal
0.00 0.00 0.00 0.00 0.00 0.00 0.00
Actual Actual Actual Actual Actual Actual Actual Actual
[DATE] [DATE] [DATE] [DATE] [DATE] [DATE] [DATE] [DATE]
------- ------- ------- ------- ------- ------- ------- -------
CHECKS ISSUED
Royalty Account
Expense
Ad Valorem Taxes
Environmental
West Coast Capital & Other
Pipeline Account
Ad Valorem Taxes
Environmental
Payroll Account
Trade Payables
Crude Payables
Product/NGL Payables
Field Account
MTBE/G&S Monthly Oper.
Turnaround
Annual Preventive Maintenance
------ ------ ------ ------ ------ ------ ------ ------
SUBTOTAL CHECKS ISSUED
CHECKS CLEARED
Royalty Account
Expense
Pipeline Account
Payroll Account
Trade Payables
Field Account
MTBE/G&S Monthly Oper.
------ ------ ------ ------ ------ ------ ------ ------
SUBTOTAL CHECKS CLEARED
FLOAT BALANCE
Beginning O/S Check Balance
Checks Issued
Checks Cleared
------ ------ ------ ------ ------ ------ ------ ------
Ending Check Float
CHANGE IN CHECK FLOAT
FLOAT BALANCE-ROYALTY
Beginning O/S Check Balance
Checks Issued
Checks Cleared
------ ------ ------ ------ ------ ------ ------ ------
Ending Check Float
FLOAT BALANCE-OTHER
Beginning O/S Check Balance
Checks Issued
Checks Cleared
------ ------ ------ ------ ------ ------ ------ ------
Ending Check Float
% of Royalty Checks Cleared
% of Other Checks Cleared
Checks Cleared
Checks issued
Check Float
Beg Bal Beg Bal Beg Bal Beg Bal Beg Bal
0.00 0.00 0.00 0.00 0.00
Actual Actual Actual Actual Actual
[DATE] [DATE] [DATE] [DATE] [DATE]
------- ------- ------- ------- -------
CHECKS ISSUED
Royalty Account
Expense
Ad Valorem Taxes
Environmental
West Coast Capital & Other
Pipeline Account
Ad Valorem Taxes
Environmental
Payroll Account
Trade Payables
Crude Payables
Product/NGL Payables
Field Account
MTBE/G&S Monthly Oper.
Turnaround
Annual Preventive Maintenance
------ ------ ------ ------ ------
SUBTOTAL CHECKS ISSUED
CHECKS CLEARED
Royalty Account
Expense
Pipeline Account
Payroll Account
Trade Payables
Field Account
MTBE/G&S Monthly Oper.
------ ------ ------ ------ ------
SUBTOTAL CHECKS CLEARED
FLOAT BALANCE
Beginning O/S Check Balance
Checks Issued
Checks Cleared
------ ------ ------ ------ ------
Ending Check Float
CHANGE IN CHECK FLOAT
FLOAT BALANCE-ROYALTY
Beginning O/S Check Balance
Checks Issued
Checks Cleared
------ ------ ------ ------ ------
Ending Check Float
FLOAT BALANCE-OTHER
Beginning O/S Check Balance
Checks Issued
Checks Cleared
------ ------ ------ ------ ------
Ending Check Float
% of Royalty Checks Cleared
% of Other Checks Cleared
Checks Cleared
Checks issued
Check Float
EXHIBIT E
ENVIRONMENTAL COMPLIANCE CERTIFICATE
Reference is made to that certain
Letter of Credit Agreement, dated as
of February 11, 2003 (as from time to time amended, the "CREDIT AGREEMENT"),
among EOTT Energy Operating Limited Partnership ("EOTT OLP"), EOTT Energy Canada
Limited Partnership ("EOTT CANADA"), EOTT Energy Liquids, L.P. ("EOTT LIQUIDS"),
EOTT Energy Pipeline Limited Partnership ("EOTT PIPELINE" and together with EOTT
OLP, EOTT Canada and EOTT Liquids, on a joint and several basis, the
"BORROWERS"),
EOTT ENERGY LLC, ("EOTT LLC"), and EOTT ENERGY GENERAL PARTNER,
L.L.C. ("EOTT GP", together with EOTT LLC, the "GUARANTORS", and together with
the Borrowers, collectively, the "CREDIT PARTIES"), Standard Chartered Bank, as
LC Agent and the other signatories thereto. Capitalized terms used and not
defined herein have the meanings given to them in the Credit Agreement.
This Certificate is furnished pursuant to Section 6(d)(ix) of the
Credit Agreement. EOTT LLC hereby represents, warrants, and acknowledges to the
LC Agent and each LC Participant that:
1. For the Fiscal Year ending immediately prior to the
date hereof, each Credit Party have complied and are complying with Sections
6(p) and 7(t) of the Credit Agreement;
2. To the best knowledge of the undersigned after due
inquiry, on the date hereof, each Credit Party is in compliance with all
applicable Environmental Laws, noncompliance with which could cause a Material
Adverse Change;
3. Each Credit Party has taken (and continue to take)
reasonable steps to minimize the generation of potentially harmful effluents;
and
4. Each Credit Party has established an ongoing program
of conducting an internal audit of each operating facility of such Credit Party
to identify actual or potential environmental Liabilities that could cause a
Material Adverse Change.
The officer of EOTT LLC signing this instrument hereby certifies that
(i) such officer is a duly elected, acting and qualified officer of EOTT LLC as
indicated below such officer's signature hereto, having all necessary authority
to act for EOTT LLC in making the representations, warranties and
acknowledgements set forth herein and (ii) to the best of such officer's
knowledge after due inquiry and consultation with the operating officers of each
Borrower, such representations, warranties, acknowledgments and agreements are
true, correct and complete in all material respects.
IN WITNESS WHEREOF, this instrument is executed as of __________,
200__.
EOTT ENERGY LLC
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
EXHIBIT F
OPEN POSITION REPORT
[Form to be agreed upon between Credit Parties and LC Participants.]
EXHIBIT G
MONTHLY LEASE VOLUME REPORT
CRUDE OIL LEASE
VOLUMES
200X
---------------
YTD YTD
JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER BARRELS BPD
------------------------------------------------------------------------------------------------------------------------------------
Mid Continent
Region
Xxxx Xxxxx
Xxxxxx
Xxxxxxx
Xxxx Xxxxx
Xxxxxx
Accruals/Other
-------------------------------------------------------------------------------------------------------------------
Total
-------------------------------------------------------------------------------------------------------------------
Total Barrels
Per Day
===================================================================================================================
PLP AVERAGE BARRELS
200X
--------------
YTD YTD
JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER BARRELS BPD
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Mid Continent
region
Gulf Coast
Region
Rockies
West Texas
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Total
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PLP Barrels
Per Day
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